My tenant will get an increase 3/1/12 based on the CPI. How do you calculate the increase?

Tenant gets yearly increase of 3% or CPI, which ever is greater. If current rent is 300,000 and CPI is greated than 3%, how do I calculate CPI to get the increase?
In Leasing Property - Asked by GITTEL B. - Sep 15, 2011
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Answer(s)

Phil E.
Broker/Agent
Londonderry, NH

If I understand your question correctly to calculate the increase based on the 3% you multiply 300,000 times 1.03 = 309,000. CPI is currently at 0.3% (www.bls.gov/cpi) so based off that it would be 300,000 times 1.003 = 300,900.

Sep 15, 2011
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Michal B.
Broker/Agent
Miami Beach, FL

(Current year CPI (average CPI-W & CPI-U) less last year CPI) divided by last year CPI multiplied by 100 will give you the per cent increase. (1+this % increase) times previous year rent will give you the new rent amount.
For example CPI-U for August 2011 is 226.545 and for August 2010 is 218.312
(226.545 - 218.312)= 8.233/ 218.312=0.0377*100= 3.77%
1.0377 is the multiplier of your previous year's rent amount to derive the new rent

Sep 15, 2011
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