Minimum Lease Payments

Written By
Paul Tracy
Updated November 4, 2020

What are Minimum Lease Payments?

Minimum lease payments are the lowest total amount that a renter can expect to pay during the term of a lease.

How Do Minimum Lease Payments Work?

When a landlord contracts a renter, the renter agrees to pay the landlord a specific periodic amount, or lease rate, for a predetermined amount of time (usually one year). The lease payments are the lease rate multiplied by the number of payment periods (usually monthly). The minimum lease payments are the lowest amount that a renter must pay once other costs (for example, utilities and insurance) have been accounted for.

Why Do Minimum Lease Payments Matter?

Minimum lease payments are an important calculation for commercial lessees and generally accepted accounting principles (GAAP) provide a framework for determining a lessee's minimum lease payments. The minimum lease payments are expressed as the present value of lease payments at the outset of a lease contract.

Activate your free account to unlock our most valuable savings and money-making tips
  • 100% FREE
  • Exclusive money-making tips before we post them to the live site
  • Weekly insights and analysis from our financial experts
  • Free Report - 25 Ways to Save Hundreds on Your Monthly Expenses
  • Free Report - Eliminate Credit Card Debt with these 10 Simple Tricks
Ask an Expert
All of our content is verified for accuracy by Paul Tracy and our team of certified financial experts. We pride ourselves on quality, research, and transparency, and we value your feedback. Below you'll find answers to some of the most common reader questions about Minimum Lease Payments.
Be the first to ask a question

If you have a question about Minimum Lease Payments, then please ask Paul.

Ask a question

Paul has been a respected figure in the financial markets for more than two decades. Prior to starting InvestingAnswers, Paul founded and managed one of the most influential investment research firms in America, with more than 3 million monthly readers.

If you have a question about Minimum Lease Payments, then please ask Paul.

Ask a question Read more from Paul
Paul Tracy - profile
Ask an Expert about Minimum Lease Payments

By submitting this form you agree with our Privacy Policy

Don't Know a Financial Term?
Search our library of 4,000+ terms