Which leasing incentive would provide a higher effective rent: Two weeks free on a 2/1 unit for $1250 or one month free on a 2/1 unit for $1275?

To determine which leasing incentive provides a higher effective rent, we need to calculate the effective rent for each option after factoring in the concessions.

For the first option, if the lease is for $1250 per month and the tenant receives two weeks free, that amounts to a concession of half a month's rent. The annual rental income without the concession would be calculated by multiplying the monthly rent by 12:

$1250 * 12 = $15,000.

With the two weeks free, the tenant essentially pays for 11.5 months:

$15,000 / 12 = $1,250 (monthly rent) multiplied by 11.5 equals $14,375.

Now, the effective rent per month can be calculated:

$14,375 / 12 = approximately $1,197.92.

For the second option, with one month free on a $1275 unit, the total annual income before the concession is:

$1275 * 12 = $15,300.

By offering one month free, the tenant pays for 11 months:

$15,300 / 12 = approximately $1,275 (monthly rent) multiplied by 11 equals $14,025.

Calculating the effective