Table of Contents:
- What is prorated rent?
- Why should you prorate rent?
- How to prorate rent
- Prorated rent calculators
When you move into a new property and it’s the middle of the month, you may not want to pay a full month’s rent. Instead, you may seek out another option: prorated rent.
However, there is often a lot of confusion over what prorated rent is, and how to calculate it. Here are the answers to the burning questions you have about prorating rent that you’ve been too embarrassed to ask.
What is prorated rent?
Prorated rent is the partial rent that the tenant pays if he or she hasn’t stayed at the property for a full month. This situation can occur if the tenant moves in mid-month, or if the tenant is forced to move out before the end of the month due to an eviction or some other reason. Usually, the landlord will calculate how much rent is due for the number of days that the tenant stays at the property. This serves as a way to keep things fair between the landlord and tenant.
When should you ask for prorated rent?
If you’re the tenant, you should request prorated rent when you move in to a new property and it’s not the beginning of the month, or if you’re moving out and it’s not yet the end of the month. If prorated rent is something you want, talk to your landlord about writing in a clause regarding prorated rent when drafting the lease agreement. Or, if you hadn’t thought about requesting prorated rent with your original lease agreement, consider adding a provision regarding prorating rent using a lease amendment.
Why should you prorate rent?
Despite the hassle, prorating rent is beneficial to both the landlord and the tenant. Keeping things fair and aboveboard does wonders for your landlord-tenant relationship, and will only help make the tenant’s stay at the property an enjoyable one.
As a landlord, it’s to your advantage to prorate rent. Not only is securing a tenant easier if you show your potential new renter that you can be flexible to their moving schedule, but it also helps if you demonstrate that you’re not out to nickel and dime him or her.
As a tenant, prorating rent is the best way to make sure you’re not paying extra for what you’re actually getting. After all, most people wouldn’t want to be forced to pay rent for time they haven’t spent at the property. Not to mention, requesting prorated rent can also be a good indicator to see if your landlord is only out to get as much money out of you as possible, while also serving as a litmus test for the rest of your relationship.
How to prorate rent
There are two commonly used methods to prorate rent manually: by the number of days in a year, and by number of days in a month. However, if you’re unsure of your math skills, you can also check out online prorate rent calculators for a quick and easy way to determine how much to charge.
Using the number of days in a year
Often cited as the most accurate way to calculate prorated rent, this method asks you to first multiply the monthly rent amount by 12 to get the yearly rent. Then, divide this yearly rent by 365 to get the daily rent. Finally, multiply this daily rent by the number of days that the tenant is paying rent for to get the prorated rent amount.
Let’s say that your monthly rent is $3,000 USD/month and you’re moving in on the 8th of March.
Prorate rent using yearly calculation:
- Step 1: $3,000 x 12 months = $36,000
- Step 2: $36,000/365 days = $98.63
- Final step: $98.63 x 8 days = $789.04
Using the number of days in a month
For a method that’s easier to wrap your mind around, calculate prorated rent using the number of days in a month. Using this method, start with the monthly rent amount and divide it by the number of days in the month. Then, multiply this amount by the number of days that the tenant is paying rent for to get the prorated rent amount.
For easier comparison, let’s continue with the example where your monthly rent is $3,000 USD/month and you’re moving in on the 8th of March.
Prorate rent using monthly calculation:
- Step 1: $3,000/31 days of March = $96.77
- Final step: $96.77 x 8 days = $774.19
Using a prorated rent calculator
If calculating the prorated rent by hand is too much to handle, have these online prorate rent calculators do the math for you:
Life doesn’t always follow an exact plan. If you’re moving in to a new place or have a pressing need to move out, it’s common for your lease term to not match up precisely with when a month begins or ends. Although the term might sound overly complicated at first glance, don’t feel intimidated by the idea of prorated rent. Once you sit down with the landlord and work out the math, you’ll arrive at a financially fair solution that will satisfy both of you.