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.
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
Read This Next
A new client recently came into my bank branch with a check for $10,000... he was ready to invest. He sat down in my office and told me that he wanted to buy gold. We don't sell gold...Read More →