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Real Estate

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  • June 1, 2022
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Fair Market Rental Value

The amount a landlord/ lessor would expect tenants/ lessees to pay each month against demised premises. In other words, it represents the annual amount per square foot that a willing tenant/ lessee would pay to a willing landlord/ lessor in arm’s length transaction. Fair market rental value depends on market forces (supply and demand) and market condition (the pricing dynamism in a given market).

Fair market rental value is also determined based on what tenants/ lessees pay for comparable properties in the same market.

It is alternatively known as fair market rent, or for short as FMR.


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