How it's calculated
Year-N monthly rent = Initial rent × (1 + escalation rate)N−1
Annual rent in year N = Year-N monthly rent × 12
Total = sum of annual rents
The default model assumes the rent steps up at the start of each year and stays fixed within the year — matching most Indian residential lease agreements that escalate annually.
Common escalation patterns
| Lease type | Escalation | 5-year total escalation |
|---|---|---|
| Residential, 11-month renewable | 10% per renewal | ~46% (compounded) |
| Residential, 33-month registered | 5% p.a. | ~22% |
| Commercial, registered lease | 15% / 3 years | ~15% at year 3, ~32% at year 6 |
| PG / serviced apartment | None or annual review | variable |
FAQ
Is escalation negotiable?
Yes — especially for longer leases or in soft rental markets. Owners often hold firm at 10% for 11-month leases (a market norm) but accept 5% on registered 33-month leases in exchange for longer commitment.
Should I use real or nominal escalation?
This calculator uses nominal escalation (rupee terms). To get the real (inflation-adjusted) cost, subtract the inflation rate from your nominal escalation. If rent escalates 8% and inflation is 5%, the real-rent increase is roughly 3% per year.