Lease Rate


DEFINITION of 'Lease Rate'

The amount of money paid over a specified time period for the rental of an asset, such as real property or an automobile. The lease rate that the lender earns from allowing someone else to use his property compensates him for not being able to put that property to another use during the term of the lease.


In commercial real estate, the lease rate is commonly stated as a dollar amount per square foot of space per year. To get a true idea of the cost of renting a space, in addition to the lease rate, the potential tenant will need to know if the lease is single, double or triple net. In other words, whether it is he or the property owner who will be responsible for expenses such as utilities, maintenance and property taxes.

In the case of an automobile lease, the monthly payment on the vehicle is based on the car's expected depreciation and residual value (a predetermined amount that the car will be worth at the end of the lease term) as well as the lease rate, which is usually stated as a percentage. Through monthly payments, the lessee compensates the automobile dealer for both the vehicle's depreciation and for tying up assets in vehicles instead of investing that money elsewhere.

  1. Capitalization Rate

    The rate of return on a real estate investment property based ...
  2. Net Present Value - NPV

    Net Present Value (NPV) is the difference between the present ...
  3. Net Operating Income - NOI

    A company's operating income after operating expenses are deducted, ...
  4. Lease

    A legal document outlining the terms under which one party agrees ...
  5. Triple Net Lease

    A lease agreement that designates the lessee (the tenant) as ...
  6. Lessee

    The person who rents land or property from a lessor. The lessee ...
Related Articles
  1. Entrepreneurship

    Top 10 Features Of a Profitable Rental Property

    Find out which factors you should weigh when searching for income-producing real estate.
  2. Home & Auto

    Tips For The Prospective Landlord

    Investing in rental property can generate serious income, but there's more to it than collecting rent.
  3. Taxes

    Tax Deductions For Rental Property Owners

    Besides creating ongoing income and capital appreciation, real estate provides deductions that can reduce the income tax on your profits.
  4. Home & Auto

    Simple Ways To Invest In Real Estate

    Owning property isn't always easy, but there are plenty of perks. Find out how to buy in.
  5. Entrepreneurship

    Find Fortune In Commercial Real Estate

    Investing in big buildings means big money - and bigger risks.
  6. Retirement

    Using Your IRA to Invest in Property

    Explain how to use an IRA account to buy investment property.
  7. Home & Auto

    Economics of Owning a Rental Property

    Learn how to find suitably priced rental property and the right rent level. Determine what maintenance costs to expect and what tax breaks are available.
  8. Home & Auto

    Should You Buy A House At Auction?

    In theory, many of the best properties are auctioned. But auctioned properties aren’t always hidden gems.
  9. Home & Auto

    5 Mistakes That Make House Flipping A Flop

    If you're just looking to get rich quick, you could end up in the poorhouse.
  10. Bonds & Fixed Income

    Credit Default Swaps: An Introduction

    This derivative can help manage portfolio risk, but it isn't a simple vehicle.
  1. Can hedge funds trade penny stocks?

    Hedge funds can trade penny stocks. In fact, hedge funds can trade in just about any type of security, including medium- ... Read Full Answer >>
  2. Does renters insurance cover storage units?

    An all-perils renters insurance policy provides coverage for the contents of storage units. Most policies limit the amount ... Read Full Answer >>
  3. Does renters insurance cover mold?

    An all-perils renters insurance policy typically provides a low set amount of coverage for damage caused by mold as long ... Read Full Answer >>
  4. Does renters insurance cover dog bites?

    A renters insurance policy typically provides liability coverage, up to policy limits, for dog bites unless the coverage ... Read Full Answer >>
  5. Does renters insurance cover theft?

    An all-perils renters insurance policy provides worldwide theft coverage for personal property after a claim exceeds the ... Read Full Answer >>
  6. Does renters insurance cover moving?

    An all-perils renters insurance policy covers damage to items resulting from a covered peril during a move. Limitations and ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Barefoot Pilgrim

    A slang term for an unsophisticated investor who loses all of his or her wealth by trading equities in the stock market. ...
  2. Quick Ratio

    The quick ratio is an indicator of a company’s short-term liquidity. The quick ratio measures a company’s ability to meet ...
  3. Black Tuesday

    October 29, 1929, when the DJIA fell 12% - one of the largest one-day drops in stock market history. More than 16 million ...
  4. Black Monday

    October 19, 1987, when the Dow Jones Industrial Average (DJIA) lost almost 22% in a single day. That event marked the beginning ...
  5. Monetary Policy

    Monetary policy is the actions of a central bank, currency board or other regulatory committee that determine the size and ...
  6. Indemnity

    Indemnity is compensation for damages or loss. Indemnity in the legal sense may also refer to an exemption from liability ...
Trading Center