What is meant by effective rent in real estate appraisal?

Effective rent refers to the actual income a property owner receives from rental units after accounting for various deductions, such as concessions, incentives, or other adjustments. This figure can be particularly important in real estate appraisal as it provides a more accurate representation of revenue than the scheduled rent, which doesn’t consider discounts or allowances that may be offered to tenants.

Understanding effective rent is crucial for appraisers as it impacts the valuation of income-producing properties. By focusing on the actual amount received, appraisers can better assess the property's financial performance and its attractiveness to potential investors. This contrasts with other terms like scheduled rent, which does not reflect the real cash flow situation due to negotiations or rental concessions that might be offered to secure tenants.

In this context, the other choices do not provide a holistic view of a landlord's real income from rental properties. The amount paid by tenants for comparable properties relates to market trends rather than actual income received. The maximum rent a landlord can charge may vary based on market conditions or regulations, thus it does not reflect the real income. The scheduled rental rate does not consider any negotiations or adjustments that can affect the net income.