How to Calculate Commercial Rent per Square Foot
When looking for commercial property to rent for your business, you might hear real estate professionals talking about the rental cost in the terms of cost per square foot. If you've ever wondered how that is calculated, keep reading.
- Difficulty:
- Moderate
Instructions
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1
Calculate the building's square footage. To do this you will measure the width and length of the building, and multiply those two numbers. Normally it is just the floor space that is figured into the square footage. For our example, assume the building is 30 x 50 feet, bringing the total square footage to 1,500 square feet.
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2
Determine the total annual rent. The owner will decide how much they want to charge per month, and multiple that by twelve months. If the want to charge $2,500 per month, the total annual rent will be $30,000.
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3
Divide the annual rent by the square footage. In the example, $30,000 would be divided by 1,500, bringing the annual price per square foot to $20.
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4
Divide the annual square footage price by 12 months, to determine the monthly rate. In our example the monthly rent would be $1.67 per square foot.
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- Photo Credit B. Holmes
Comments
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I agree...but..it's how they have done it for years..first finding the yearly rental cost, then dividing to get monthly..seems a waste of time to me too.
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How to Calculate Rent Price Per Square Foot for Commercial Space, interesting...
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because for some reason they advertise commercial property using commercial square footage which is the annual price per square foot. you then have to divide by 12 to get the monthly price per square foot....I agree it makes no sense as to why its done that way and I'd be curious for someone to explain it...
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yeah dude you jjust explained it better in two sentences. lol
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Why wouldn't you just divide $2500/ month by 1500 sq ft to to get $1.67 per sq ft per month? There was not reason to multiply by 12 months and then divide by 12 months, that was redundant.
