When you search New York City rental listings, you may see the term “net effective rent,” or a higher rent amount called the “gross rent.” This can make it difficult to figure out how much money you’ll be handing over to the landlord each month.

When landlords offer concessions like a month or two of free rent to encourage you to sign a lease, they often advertise the apartment at the net effective rent, which means the concession is being factored into the advertised price, giving you a discount.

For example, if an apartment is $3,600 a month and the landlord is offering a free month of rent as a concession on a 12-month lease, then the net effective rent will be $3,300.

Need to figure out the gross rent for an apartment? To calculate your actual monthly payments you take the total sum of the concession, divide it by the number of months on the lease, and subtract that amount from the gross rent. Too confusing? You could always use Brick Underground's rent calculator.

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Some landlords want you to pay the higher gross rent on a monthly basis, which in the example above is $3,600, and then give you a "free" month at the beginning or end of your lease. This is typical and it has benefits when—and if—you renew your lease, because any rent increases won’t come as such a shock. That's because when your rent goes up—by say 5 percent—it is based on the gross rent rather than the net effective.

But sometimes the discount is spread out over the course of the year, so you pay the net effective rent for the duration of the lease. This can be something you ask for at lease signing, especially when there is a problem with the apartment or demand for apartments is low (which is not the case now).

Renters who are new to NYC are often unfamiliar with the difference between gross rent and net effective rent. A few years ago a StreetEasy survey found that 40 percent of renters were confused by the term net effective rent, prompting the listings site to make rent terms clearer in listings. There’s now more transparency about concessions, with the lease length and gross rent spelled out, when applicable.

Keep in mind that when you search for an apartment on StreetEasy—and other sites for that matter—your results will pull in listings when either the net or gross rent fits your criteria.

Most importantly, when you renew your lease you'll be negotiating (and facing rent increases) based on the gross rent, not the discounted net effective rate. This was a big shock for many renters who got big discounts on rent during the pandemic and then received lease renewal with rent hikes from 30 to 60 percent.