What does "market rent" represent?

Market rent refers to the rental rate that a property would receive in the open market, reflecting the price that a willing landlord and a willing tenant would agree upon in competitive conditions. This concept is important as it establishes a benchmark for rental values based on current demand and supply, property location, and amenities.

Market rent is determined by various external factors, including comparable rental prices in the area, economic conditions, and the overall real estate market dynamics. This rate is generally seen as more accurate and reflective of the property's true value in the market compared to other definitions of rent, such as the amount set by the landlord before listing or government-regulated rents, which may not adjust according to prevailing market trends. Therefore, when assessing rental prices, market rent is integral for effective pricing strategies and investment decisions in the real estate sector.