Market Rent being greater than passing rent indicates an under rented property. A) True B) False

Understand the Problem

The question is asking whether the statement that market rent being greater than passing rent indicates an under rented property is true or false. Essentially, it tests the understanding of rental terms and what it means for a property to be under rented.

More Information

Market rent is the current highest rent that a property can command, while passing rent is what is currently being paid. If the market rent is higher than the passing rent, it indicates that the property could be rented at a higher price, hence being under-rented.

Tips

A common mistake is confusing passing rent with market rent. Passing rent is usually lower due to older terms in lease agreements.

Sources

• Real Estate Leasing 101 - Passing Rent vs. Market Rent - crematrix.com