A 1,200 square foot property had a base rent of $14 per square foot plus 5% of all sales over $100,000. If gross sales for the yearr were $350,000, what would be the monthly rent?

Answer 1

First calculate the base rent:

1,200sf x $14 = $16,800 (per year)

Divide $16,800 by 12 months, you get $1,400 (per month)

Now calculate the percentage rent:

Sales are $350,000, but you only have to consider the amount over $100,000, so it will be $250,000

Percentage rent is 5% of $250,000 = $12,500 (per year)

Divide $12,500 by 12 months, you get $1,041.66 (per month)

$1,400 (base rent) + 1,041.66 (percentage rent) = $2,441.66 (per month)