What is Base Rent?
Base rent in real estate refers to the minimum amount of rent that a tenant is required to pay for a property. It is typically specified in a lease agreement and is generally fixed for the term of the lease. Base rent is typically paid on a regular basis, such as monthly or quarterly, and is usually paid in addition to any other charges or fees associated with the property, such as utilities, maintenance costs, or property taxes.
In a commercial lease, base rent is often used as a starting point for calculating the total cost of renting a property. The landlord may also charge the tenant additional fees or charges, such as common area maintenance (CAM) charges or real estate taxes, which are typically based on a set Price Per Square Foot (PSF) amount or a percentage of the base rent.
Base rent is an important concept in real estate, as it helps to establish the minimum amount that a tenant will be required to pay for the use of a property. It is also a key factor in determining the overall financial performance of a rental property, as it helps to establish the property's rental income and cash flow.
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