Ideally, people move into their rentals on the first of the month, and when their leases expire on the final day of the month, they move out.
Life, on the other hand, is rarely so straightforward. A circumstance arises that requires you to move-in later, such as the middle of the month or near the conclusion of the month.
For example, until repairs are completed, you may not be able to call your new apartment or house your home.
Fortunately, most landlords will charge you prorated rent (number of days you occupy the property) rather than a full month’s rent.
First and foremost, however, what exactly is prorated rent? How can you figure out how much rent you’ll have to pay? What is the mechanism behind it?
Here, we provide accurate and straightforward answers to all of these inquiries.
What is Prorated Rent?
A prorated rent is a payment made by a tenant that is dependent on the number of days they occupy a property.
To put it another way, it’s the rent a tenant pays based on the date they moved in. It reflects the rent payments due for a partial month of occupancy.
A prorated rent is a reasonable approach for landlords to compensate tenants who cannot move-in at the start of their lease agreement due to circumstances beyond their control.
Even though prorating rent is a boon to tenants, the property manager is the one who loses the most in this situation.
Often, the property manager will forego the revenues for a number of days to accommodate you.
To clarify, pro-rated rent, pro rated rent, and prorated rent all refer to the same thing.
How Do You Benefit from a Prorated Rent?
A prorated rent amount provides financial advantages to the tenant. A property manager willing to give up a certain number of days’ worth of rent to let you in will benefit you in the following ways:
You’ll Save Money
Moving in can be financially draining, if not outright impossible. Many tenants are concerned about the upfront expenditures. For this reason, it’s only natural to try to save as much money as possible during this period.
If a property manager agrees to have your rent prorated, the benefit is that you will save money to put towards other things.
Establish a Rapport with the Property Manager
Not only would a prorated rent amount save you money, but it will also help you build a bond with your property manager.
A compassionate landlord often makes a positive impression on their tenants. This might be the start of a wonderful tenant-landlord relationship, where there’s mutual trust and fairness.
It Tells You Who Your Landlord Is
The willingness of a property manager to accept a prorated rent speaks volumes about their character. If they charge you a month’s rent, you can bet they’ll try to squeeze you at every opportunity. It warns you to prepare for tougher times ahead.
Is it true, however, that agreeing to a rent prorated benefits the property manager as well? It certainly does!
Even though they will lose several days’ worth of money, they will gain in the long run. In fact, one of the advantages is that they will have a higher chance of securing a long-term tenant.
How Does Prorated Rent Work?
Prorated rent is a simple idea to grasp. The amount of days you stay at a house is what you pay rent for. For example, if you stay in a property for 20 days, you just pay for those 20 days, not a full month’s rent.
Are Landlords Legally Required to Prorate Rent?
Many wonder whether or not property managers are legally required to prorate rent as you wish.
Well, a property manager has no legal obligation to offer prorated rent. On the other hand, a prorated rent can be a kind of favor from a property manager and, hence, is not a must-have.
As a result, whenever you approach the property manager, act as though you’re requesting a favor (prorate rent) rather than asserting your claim to it. If you approach the property manager forcefully, on the other hand, there’s a good possibility your request will be denied.
No reasonable property manager would forego a number of days’ rent for someone who feels entitled.
Negotiate Before Signing the Lease Agreement (prorated rent agreement)
Negotiating prorated rent is best done shortly before signing the lease agreement. If you explain your desire during this time, the property manager will be more likely to accommodate you.
Also, because the property manager is anxious to fill the vacancy before signing the lease, they will prorate rent because you have some negotiating power.
If you negotiate prorated rent price after you’ve signed the lease, you’ve probably given up any leverage you had. Furthermore, your lease agreement may include a clause or term forbidding prorated rent.
As a result, always read the lease carefully before signing it. Also,iIf there is any room for negotiation, do so before signing it.
How to Calculate Prorated Rent
It’s not difficult to calculate prorated rent that you’ll have to pay. With that said, calculating prorated rent precisely and fairly is crucial.
You don’t want to be in a scenario where you’re paying more than the calculation suggests.
The concept of prorating rent is rather straightforward, and most approaches involve two phases.
The first two steps are establishing the daily rent rate and multiplying it by the number of days the tenant occupies a residence.
Here are the four ways prorated rent is typically calculated:
- Using Days in a Year Method
- Using Days in Specific Month Period
- Using Days in an Average Month Method
- Using Banker’s Month Method
Using Days in a Year Method
In this method, you should multiply the monthly rent by 12 to get the total yearly rent, then divide that figure by the number of days in a year to get the daily rent (365).
For example, if your monthly rent is $1,500, the daily rate is $49.31 (18,000/365). With that said, multiply that figure (daily rent) with the number of days you occupied the home. So, if you occupied the home for 16 days in a month, your prorated amount should be $788.96 (49.31×16).
Using Days in Specific Month Period
If you’re on a month-to-month lease, this strategy will work for you. This method, in theory, determines the daily rental fee based on a certain month.
To obtain your prorated amount, divide a monthly fee by the number of days in the month in question. For instance, if you are moving into your apartment in the month of January and your monthly rent price is $1,500, your daily rental cost is $48.38 ($1,500/31). If you stay in the apartment for 18 days during the month of January, your prorated amount should be $870.84 ($48.38 x 18).
You should be aware that the outcomes of employing this strategy will vary depending on the month and year (leap year). The daily rent for a $1,500 a month apartment in February, for example, is $51.72 ($1,500/29), in a leap year, as opposed to $53.57 ($1,500/28) in a normal year.
Using Days in an Average Month Method
This method is similar to the “Using Days in a Specific Month Period” method, but it changes slightly.
Instead of calculating the daily rent based on a month’s rent, this technique calculates the daily rent based on the average number of days in a month.
Taking this into account, the average number of days is 30.42 (365/12). Divide the month’s rent by the average number of days in a month, then multiply the result by the number of days you lived there to get the prorated amount.
For example, if your monthly rent is $1,500 and you occupied the home for 20 days, your prorated amount is $986.19 ({$1,500/30.42} x 20).
Using Banker’s Month Method
This method, in theory, is to calculate prorated rent using the daily rental cost based on the average number of days in a month. The monthly rent is divided by 30 days, the number of days in a Banker’s month.
For example, if your month’s rent is $1,500 and you occupied the home for 20 days, your prorated amount is $1,000 ({$1,500/30} x 20).
You should ideally be aware of your landlord‘s prorated amount calculation process.
Using a Prorated Rent Calculator
Manually calculating prorated rent might be tedious at times. As a result, adopting online tools can reduce headaches and speed up the process.
To make your job a little easier, join up for the following online tools:
- RentVine Prorate Calculator
- Good Calculators Prorated Rent Calculator
- Omni Prorated Rent Calculator
When to Collect Prorated Rent
In the instance of a mid-month move-in date, the prorated rent should be collected on the second month of tenancy. By this point, the tenant should have already paid the first month’s rent and the security deposit, as is customary.
In the case of a move-out, the prorated amount should be collected at the beginning of the month or the week.
Any rent owed to the new owner would be paid at closing if a rental property was sold in the middle of the month.
Methods of collecting rent vary from property managers. Some initiate collecting rent on the first day of the month, while others on a different date.
Reasons a Landlord Would Prorate Rent
Prorated rent is something that a reputable property manager would be willing to provide you. Repairs and responses to emergencies, among other things beyond your control, will reveal the true character of your new property manager, as well as whether or not they will accept your request for a prorated rent.
Many people wonder what may cause a property manager to offer prorated rent. Here are a few reasons why a property manager could agree to accept your request for prorated rent:
Selling Rental Property
When a rental property is sold, there’s a good chance that the tenants are still there. With that said, depending on the date of sale, both the buyer and the seller are entitled to a specific amount of rent.
As a result, the property manager will compute the prorated rent required and what is owing to the new owner. For example, if the property were sold in the middle of the month, say the 15th of July, the new owner would be entitled to some of the rent dues for July, from July 15 to July 31.
Vacation Rentals
Because tenants frequently rent vacation homes for an odd number of days, it would be unreasonable for the property manager to charge a full month’s rent when they only stayed for a few days.
As a result, the property manager will calculate the daily fee and multiply it by the number of days the tenant is in residence. With that said, you’ll pay the total rent for the period you occupy the property.
Tenant Needs to Stay Longer than Lease
As previously stated, things may not go according to plan, and your assumption that you’ll be able to move into your new apartment on the first of the month may not be accurate.
If, for example, repairs cause your move-out date to be postponed, your existing landlord may prorate your rent and charge you for the additional number of days you occupy the property rather than charging you for the entire month.
Tenant Legally Breaks Lease Early
A tenant can legally break a lease arrangement early in certain circumstances.
If a renter is on active duty military orders, they have the right to break the lease early without incurring any costs. As a result, the tenant will only be responsible for paying rent until the day they vacate the premises.
Furthermore, a victim of an assault has the option of breaking the contract early and paying the rent until the day of their departure.
Mid-Month Move-In Date
Many people anticipate moving into their new place on the first of the month. However, this doesn’t always happen. As a result, they’ll have to wait, depending on the situation, before they move-in.
Ideally, you have paid the first month’s rent and the security deposit. Depending on their circumstances, the landlord may be ready to prorate rent based on the number of days the tenant occupies the residence during the month.
Prorated Rent from a Landlord Perspective
Prorating rent is advantageous to you as a landlord.
Suppose tenants pay the first month’s rent and move-in late, and you offer prorated rent. In that case, this not only demonstrates your adaptability in a scenario, but also improves the chances of a long-term relationship with your tenant.
The tenant will also realize that you aren’t here to take every penny out of their wallet, but rather to be fair. Waiving a number of days’ rent will change their perception of you as a landlord.
Prorated Rent from a Tenant Perspective
Prorating rent as a tenant is one of the ways to make sure you’re not paying more than you should be. Paying for extra days that you didn’t occupy the property may feel like unfair treatment from the landlord.
Furthermore, prorating rent can be used as a litmus test to see if your landlord is out to get every last bit from you.
Final Thought
One of the most effective strategies for a tenant to save money while renting a property is to prorate the rent. If a tenant moves in or a tenant moves out in the middle of the month, a decent landlord will be willing to waive a number of days’ rent for them.
If you’ve paid the first month’s rent and prorating rent isn’t an option, you’re likely to feel cheated, and your relationship with the landlord may not be as positive as you had hoped.
Examine the lease agreement before paying the first month’s rent to see if any restrictions are preventing prorating rent. If there aren’t any, speak with your landlord about the move-in date and negotiate a prorated rent before signing the lease.
