When it comes to preparing a unit for occupancy (or, if you’re a tenant, if you’re getting ready to move), you might encounter the term “prorated rent”.
Amongst the other paperwork or landlord inspections you might be preparing for, it can seem like an unexpected inconvenience to try and calculate prorated rent. However, determining how much to charge is super easy, as we’ll show you in this article.
And, for tenants, it is a great opportunity to save money. Essentially, it means you only have to pay rent for the number of days you are living in a rental property, which means you don’t have to pay a full month’s rent.
In this post, we’ll explain what prorated rent is and how to calculate it!
What is prorated rent?
Prorated rent is essentially a partial payment charged for only the period of time in which a unit is occupied.
For example, if a renter were to move into an apartment on the 15th of the month, the landlord might offer “prorated rent” for that month — i.e., instead of having the tenant pay for a full month while only living in the unit for half a month, they would pay half the monthly payment.
It might seem like a complicated process, but it’s easy to understand once you break it down into a simple formula (pictured & explained below).
How does it work?
Prorated rent generally functions as a negotiated discount payment between landlords and tenants when the tenant will not be occupying the residency for the entire duration of the month.
Depending on which state you manage rentals in, it can be calculated in a few different ways, so it’s important to be sure you’re up-to-date on the landlord tenant laws in your state.
For example, in some states, you must calculate a flat 30 day while in other states you should calculate prorated rent by the exact number of days in the designated month.
How to calculate prorated rent?
As mentioned above, how you calculate your prorated rent will depend on your state’s guidelines. If you’re a landlord, double-check your state requirements. If you’re a tenant, you can also check your state’s landlord tenant laws, or ask the landlord to determine how they calculate the payment.
Below, we’ve provided a few examples of how to calculate prorated rent, depending on whether you charge for the exact number of days in the month or a flat 30-day month.
For EXACT number of days in the month:
- Take your monthly rent and divide it by the number of days in the month to determine your daily rent.
- Then, take the daily rent amount and multiply it by the number of the tenant will occupy the unit for that month.
$ Monthly Rent / # of Days in Month = $ Daily Rent
$ Daily Rent * # of Days Occupied by the Tenant = $ Total Prorated Rent
For FLAT 30 day:
- Take your monthly rent and divide it by 30 to determine your daily rent.
- Then, take the daily rent amount and multiply it by the number of the tenant will occupy the unit for that month.
$ Monthly Rent / 30 = $ Daily Rent
$ Daily Rent * # of Days Occupied by the Tenant = $ Total Prorated Rent
Can I use prorated rent with rental property management software?
Yes, you can! RentRedi makes it easy to account for prorated rent in your charges. If you send out a prorated rent charge from your RentRedi dashboard, your tenant can submit partial payments!
Your tenant can also set up auto-pay for rent payments to make paying rent even easier for their entire lease.
Additionally, you can use RentRedi for much more than its rent collection properties. Did you know that you can also screen tenants, sign leases, list properties, and manage maintenance—all from one dashboard? Yes, that’s right! Sign up here to get started!
