In real estate records, the expressions "gross rent" and "net rent" frequently occur, corresponding in general to the "gross profits" and "net profits" of a mercantile enterprise, but too often used in a vague and indefinite sense.

The term "gross rent" properly designates the total amount received by the owner from the tenant or lessee for the use of certain property. In order to obtain this gross rent, however, the owner is frequently obliged to make certain outlays, and the difference between the gross rent and these necessary outlays constitutes the "net rent."

The exact nature of these outlays cannot be given, for they vary according to local laws, the nature of the property, and the terms of the agreement. The necessary outlays in the United States usually include taxes, insurance, and repairs.

In apartment or office buildings the following expenses must usually be added: light, water, heat, power, and wages.

The essential point is to include all the necessary expenditures, in order to obtain the net rent.