As a landlord, you may have tenants paying on time each month, and in the event that one needs to move, he or she gives you plenty of notice and leaves at the end of a month.
That’s great!
But, if you find yourself in a situation where a tenant needs to move at a specific date halfway through the month, how much rent should you charge them?
This is where something called prorated rent comes in.
Prorated rent simplifies the process of calculating a tenant’s rent for a partial month’s occupancy, maintaining balance in monthly rent figures.
With prorated rent, you as a landlord modify the rent to precisely account for the days a tenant occupies the property within a distinct month.
It guarantees that everyone pays accurately for their stay.
In this article, we’ll break down everything you need to know about prorated rent, including how to calculate it.
How Does Prorated Rent Work?
You can calculate prorated rent by first figuring out the daily rate of rent.
This daily rate is then multiplied by the number of days the tenant will occupy the unit during the first or last month.
Using prorated rent ensures that tenants are only accountable for rent during their actual period of occupancy, which ensures fairness to both the tenant and landlord, and best of all, prevents any potential financial disagreements.
How to Calculate Prorated Rent in 4 Steps
To compute prorated rent, follow these steps:
1. Identify the amount of monthly rent.
2. Work out the daily rent rate. This can be achieved by dividing the total rent for the month by the total days in that specific month when the move-in or move-out takes place.
3. Take the daily rent rate and multiply it by the number of days the unit is occupied.
4. The formula can be represented as follows: Prorated Rent = (Amount of Monthly Rent / Total Days in the Month) x The Number of Days the Unit is Occupied.
Prorated Rent Example
Let’s assume that you have a tenant moving in on September 15th, and the monthly rent is $1,500.
September has 30 days, so the daily rent rate is $1,500 divided by 30, which comes out to be $50 per day.
Since the tenant will be occupying the property for 16 days (from the 15th to the 30th), the prorated rent for September would be $50 x 16 = $800.
Prorated Rent: Frequently Asked Questions
Next, we’ll take a look at some of the most commonly asked questions associated with prorated rent.
Q: Does a Prorated Month Have 30 or 31 Days?
A: The calculation for prorated rent depends on the total days in the specific month of the tenant’s move-in or move-out.
If a tenant is moving in or out in March, the calculation should be based on 31 days, as March has 31 days.
For February, the calculation should be based on either 28 or 29 days, contingent on whether the year is a leap year.
Q: What are Tenant’s Rights When It Comes to Prorated Rent?
A: Tenants are entitled to request prorated rent when they only live in a property for part of a month rather than the full monthly term.
In this case, tenants would only be responsible for the cost corresponding to the specific days they reside in the property.
Q: Is Prorated Rent Legal?
A: Yes, prorated rent is legal and widely practiced. However, the requirement to prorate rent and the method of calculation can vary by jurisdiction, so landlords should familiarize themselves with local laws and regulations.
The Bottom Line: Prorated Rent
There you have it: prorated rent is an easy and simple solution for handling rent payments during situations of partial month occupancy.
Whether you’re a new or current landlord, be sure to include it in your lease agreement moving forward to prevent any disagreements or discrepancies.
