Rack-rent denotes two different concepts:
- an excessive rent.
- the full rent of a property, including both land and improvements as if it were subject to an immediate open-market rental review.
The second definition is equivalent to the economic rent of the land plus interest on capital improvements plus depreciation and maintenance—the normal market rent of a property—and is not inherently excessive. Also, this may be different from the rent actually being received. For short term lettings—e.g. rooms in hotels or houses let for holidays, the "rack rent" is the maximum potential rent assuming full occupancy (less downtime for repairs).
