Rent can make or break a business. Lock yourself into the wrong lease, and you’ll be stuck paying thousands every month that eat into your profits. That’s why we built our Business Rent Calculator — so you can instantly see exactly how much rent will cost, whether it fits your budget, and how it impacts your bottom line.

All you need to do is enter your rent details, and the calculator does the math for you. No spreadsheets, no guesswork — just clear numbers in seconds. In this guide, we’ll show you how to use the calculator, explain the different types of commercial leases, and give you the rules of thumb every business owner needs to know before signing a lease.

 

Business Rent Calculator

Total Square Feet * Base Rental Rate ($/sq ft/year) * Total Pass-Throughs ($/sq ft/year) * Lease Term (Years) * Annual Rent Increase (%) Calculate

 

What is a commercial lease?

A commercial lease is a legally binding agreement between a landlord and a business tenant that allows the tenant to rent property for commercial use. Unlike residential leases, commercial leases often come with added responsibilities and costs such as property taxes, insurance, and maintenance. Terms are usually longer than residential leases — often 3, 5, or even 10 years — and rent is frequently calculated on a per-square-foot basis.

Key elements of a commercial lease typically include:

• Base Rent: The fixed cost for occupying the space.

• Square Footage: Determines the scale of rent.

• Lease Term: The duration of the agreement.

• Additional Costs: Property taxes, insurance, and common area maintenance.

  Understanding these terms is vital because they affect the total cost of occupying the space.

 

How to calculate commercial rent

Commercial rent is usually based on the square footage of the space multiplied by the cost per square foot. On top of that, you may need to add additional expenses such as common area maintenance (CAM), property taxes, or utilities.

Example:

• 2,000 square feet × $20 per sq ft = $40,000 annual base rent

• Divide by 12 = $3,333 monthly rent

  If your lease is a net lease (explained below), you’ll need to add other expenses such as property tax and insurance. This is where the calculator becomes invaluable — it does the math for you and ensures nothing is missed.

How to calculate the rental agent’s fee

Many commercial rentals involve brokers or agents who help secure the lease. Their fee is typically a commission based on the lease value, often between 3% and 6%.

Formula:

\text{Annual Rent} \times \text{Commission \%} = \text{Agent Fee}

Example: If annual rent is $50,000 and the commission rate is 4%, the fee would be $2,000.

In many cases, the landlord covers this cost, but in some arrangements, the tenant may be responsible. Always check your lease to clarify who pays.

Single, double, and triple net leases

Commercial leases often fall into one of three structures:

• Single Net Lease (N): Tenant pays rent plus property tax.

• Double Net Lease (NN): Tenant pays rent, property tax, and insurance.

• Triple Net Lease (NNN): Tenant pays rent, property tax, insurance, and maintenance (the most common type in retail and office space).

Here’s a quick comparison:

Lease Type	Tenant Pays	Typical Use
N	Rent + Property Tax	Small offices, short-term leases
NN	Rent + Tax + Insurance	Midsize retail or office
NNN	Rent + Tax + Insurance + Maintenance	Larger commercial spaces, shopping centers

 

The lease type you sign significantly affects your total rent obligation, which is why it’s crucial to know which applies before budgeting.

How to find out how much rent a business pays

To determine the true rent cost:

1. Review the lease agreement carefully for base rent and extra charges.

2. Calculate rent per square foot and multiply by the space size.

3. Add on any additional costs like insurance, CAM fees, or property taxes.

4. Use our Business Rent Calculator to automate the process and avoid mistakes.

How much of my business income should go to rent?

There are industry benchmarks to help determine what percentage of income should be allocated to rent:

• Retail: 5–10% of gross sales

• Restaurants: Ideally less than 10% of total revenue

• Offices: 2–4% of revenue depending on location and amenities

  For example, if your retail store brings in $500,000 annually, your rent should ideally stay below $50,000 per year (10%). Exceeding these ratios may place your business at financial risk, especially when combined with other overhead costs like payroll and utilities.

Small business rent calculator

Small businesses often operate on tight margins, so rent affordability is even more critical. A good rule of thumb is to keep rent well below 10% of revenue, ideally closer to 5%.

Example: If your coffee shop makes $300,000 a year, your rent should stay under $30,000 to remain sustainable. Our small business rent calculator lets you test different revenue and rent scenarios so you can see instantly whether your lease terms make sense.

Common mistakes when budgeting for rent

• Ignoring hidden costs like property taxes, maintenance, and insurance.

• Overcommitting to larger spaces than necessary.

• Assuming rent won’t increase over time (many leases include annual escalations).

• Confusing gross lease and net lease terms.

Why calculating rent correctly matters

Rent is often the second-largest business expense after payroll. Overpaying or miscalculating rent can strain cash flow, reduce profitability, and even lead to business failure. On the other hand, getting rent right gives you stability, healthier margins, and more capital to reinvest into growth.