Moving into a new place invariably comes with all sorts of utility start-up fees, moving charges and other costs that rack up scarily fast. So it’s pretty nice that prorated rent is sometimes an option. Finally, renters get a price break!
What is prorated rent?
Think of prorated rent as a partial rent payment.
It’s common for a tenant to pay prorated rent when they move in mid-rent cycle. This is a win-win scenario because this helps the landlord fill the property and collect some of the monthly rent, rather than letting the unit languish. Plus, the renter can get settled sooner and not have to wait until the first of the month to occupy the space.
Sometimes, it’s necessary to have an odd move-in date, but occasionally things may happen that are out of your control. Let’s say the landlord or property management company fails to have the place ready for you to move in on the date stated on the lease. You likely have a case for a prorated month. That said, if move-in is not on the first of the month, then how do you prorate your rent correctly? A partial rent payment, or prorated rent, requires some calculation.
Math whiz or not, you (or your landlord) can use one of the following easy-to-follow formulas to figure out what you owe.
How to calculate prorated rent
It’s not tricky at all to figure out how to calculate prorated rent, although the way you do it depends on the type of lease. It merely requires some basic math skills that you hopefully mastered back in elementary school. Always check with your landlord to find out which method to use, though. Chances are, there’s a preference.
Here are a few examples to help you figure out the calculations and/or double-check the property management company’s work.
1. Prorate by days of a specific month
This formula is generally used for prorating a month-to-month or six-month lease. You’ll need to calculate your daily rent rate and the number of days you’ll be spending in the unit that month to determine the prorated rent amount.
Here’s how it works: You’re moving in on September 25 and the full rent is $1,200 a month. You can calculate what you owe by the number of days remaining in the month (in this case, September has 30 days — so there are five days left). To calculate, first find out the daily rent rate by dividing the rent by the number of days in the entire month ($1,200 divided by 30 equals a daily rate of $40). Then, multiply that by the days you’ll be in the unit for that month. ($40 daily rate x 5 days = $200). Voila!
The result is that you owe $200 prorated rent.
2. Prorate by days in an average month
Not all months have the same number of days. This formula instead averages out the number of days per month in a given year and uses that to determine the average daily rent rate. You’ll then multiply that by the days in the unit that month to determine your prorated rent by days in an average month.
Once again, we’ll assume a $1,200 a month lease with a move-in date of September 25. Your average number of days in a month is 30.42 (365 days in a year/12 = 30.42). Next, figure out the daily rate by taking rent and dividing it by the average days ($1,200/30.42 = $39.45). Then, multiply the daily rate by the number of days you will occupy the space outside the regular rent period ($39.45 x 5 days = $197.25).
Keep in mind that leap years will slightly adjust this formula!
3. Prorate by a banker’s calendar
Because the number of days in the month varies, your prorated rent might be different month-to-month. In some cases, your landlord may follow the banker’s calendar. This consists of 12 months, each having 30 days, and amounting to a 360-day year.
Calculate this by dividing the rent by 30 ($1,200/30 days = $40 daily rate). Then, multiply that by the number of days in the unit that month ($40 x 5 = $200). Be sure to ask if this is the case before you assume it’s a 31-day month and write the wrong size check!
4. Prorate by days in the year
You can also prorate by the number of days in a year for a year-long lease. Once again, this rate will slightly change on a leap year.
For example, let’s once again assume that the rent is $1,200 and you need it for five extra days. First, you need to figure out the yearly rent rate. multiply the monthly rent by 12 months ($1,200 x 12 = $14,400). Once you have the yearly rent rate number, divide it by 365 ($14,400/365 = $40). This is the daily rental rate. Finally, multiply your daily rent by the number of days that you’ll be paying rent for ($40 x 5 = $200). That’s your prorated rent amount.
Request prorated rent in writing
As the tenant, you should request prorated rent when you plan to move into a new property during the rent period. Be sure to ask for a response to your request in writing, and confirm the amount (and calculation method) upfront.
Also, insist nicely that the landlord include it in your lease contract. Being proactive will help you avoid facing a conflict or a small claims court resolution later.
Prorated rent laws vary by state
Make sure you check your specific state’s laws about prorated rents, especially if you’ve requested prorated rent at the end of the lease. Most states need a month’s notice for a tenant to end a lease that is month-to-month. Check yours before making any plans to move out, so that you don’t accidentally forfeit fees. If you choose to break your lease or move out before the end of the month, you might not qualify for prorated rent.
Win-win all around
Calculating prorated rent is an easy way to save some extra bucks during a time when you probably need it. And if you don’t feel like doing the legwork yourself, use this prorated rent calculator instead!
