Tenants as well as landlords depend on knowledge of prorated rent. Whether you are leaving early or moving in mid-month, prorated rent guarantees you pay only for the days you live on the property. We will walk over how prorated rent works, when it applies, and how you can quickly figure it out in this post. Using a pro-rate calculator will help you to guarantee correct rent payments and prevent undercharging or overpayment.
Prorated rent: what is it?
The part of rent paid when a tenant only spends half of a month on a certain property is known as proration. If a tenant comes in on the fifteenth of the month, for instance, they shouldn’t be expected to pay the whole rent for the month. Rather, the rent is changed to show the days they will be residing in the rented unit.
Particularly in situations when move-in or move-out dates fall outside the start or end of a calendar month, this approach of computing rent guarantees equity for both sides. By precisely and fairly handling these partial-month situations, prorated rent helps to simplify the leasing process.
When should I apply prorated rent?
Prorated rent would be required in a few different circumstances. When a renter moves in or out of a rental property on a date that does not coincide with the first or final day of the month, most usually prorated rent is applied.
For example, prorated rent should be credited from the day a tenant signs a lease to the end of the month if the contract starts on the 10th of the month. In the same vein, should a tenant be leaving the property before the month ends, the landlord should figure prorated rent for the days the tenant stays. Prorated rent calculations may also be necessary in other situations including lease renewals or changing rental durations.
Prorated Rent Calculations: Methods
Calculating prorated rent just requires a formula. To calculate the daily rent rate, first divide the entire monthly fee by the number of days in the month. Multiply that daily rate then by the number of days the tenant will be using the property during the partial month.
A basic yet effective idea that guarantees equitable rental payments for tenants and landlords both is prorated rent. Applying the prorated rent approach helps both sides prevent partial-month payment misinterpretation. Using a pro-rate calculator can help you to assure accuracy in every transaction and thus make calculating prorated rent even simpler.