What is pass on rate in SAP RE - Real Estate Management?

SAP Term: pass on rate

• Component: RE

• Component Name: Real Estate Management

• Description: A means of defining the affect of a change in mortgage rates on allowed rents. The pass-on rate changes incrementally by differing amounts depending on the mortgage rate level and how it changes. A critical actor is that when the mortgage rate is lowered, rent is reduced by the amount that it was increased the last time the mortgage rate was increased.

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• Key Concepts: 
  Pass on rate is a term used in SAP Real Estate Management (RE) to refer to the rate at which a tenant pays for their rent. This rate is determined by the landlord and is based on the tenant's income, the size of the property, and other factors. The pass on rate is used to calculate the tenant's rent and is typically expressed as a percentage of the total rent. 
  
  How to use it: 
  The pass on rate is set by the landlord and can be adjusted at any time. The landlord can also set different pass on rates for different tenants. In order to calculate the tenant's rent, the landlord must first determine the pass on rate for that tenant. Once this has been done, the landlord can then use this rate to calculate the tenant's rent. 
  
  Tips & Tricks: 
  When setting a pass on rate for a tenant, it is important to consider all factors that may affect the tenant's ability to pay their rent. This includes their income, the size of the property, and any other factors that may influence their ability to pay their rent. It is also important to ensure that the pass on rate is fair and reasonable for both parties involved. 
  
  Related Information: 
  The pass on rate is just one of many terms used in SAP Real Estate Management (RE). Other terms include lease term, rental agreement, and occupancy agreement. It is important to understand all of these terms in order to effectively manage a real estate portfolio. Additionally, understanding these terms can help landlords make informed decisions when setting rental rates for their tenants.