After days, weeks, or even months of searching, you’ve finally found an apartment or housing rental that fits your needs and your budget. But for whatever reason, you’re not able to move in until the 4th, the 18th, or even the 27th day of the month. Should you really be expected to pay for a full month’s rent? In most cases, no. This is known as prorated rent, and here’s prorated rent explained.
What is Prorated Rent?
Whether they spell it pro-rated rent, pro rated rent or the correct way, prorated rent, they all mean the same. Most landlords begin their rent cycle on the beginning of the month. But life can be messy, and tenants can’t always move in on the first of January. Maybe their old lease expires in the middle of the month, they’re looking for a place on short notice, or they want their move-in date to coincide with the start of the school year or a new job. And when move-out day comes, some renters also need to leave before the end of the month. In these situations, most people want to have their rent prorated.
So, what does prorated rent mean?
Also known as pro rata rent, the quick and easy prorated rent definition is rent that’s calculated proportionately. In other words, you’ll pay rent not based on the total monthly price, but for how many days you used the rental that month.
How Does Prorated Rent Work?
If you stay in the apartment for 18 days in July, you pay for only 18 days that month. That’s pretty easy, right? But now that we’ve tackled prorated rent’s meaning, there are some other factors to consider.
When is Prorated Rent Required?
In most places, prorated rent is not actually required by law. Most landlords will prorate rent if you move in during the month, but some may have a problem with prorating rent for move out.
That’s why you should always check with your landlord and get it in writing, just to make be sure.
How to Get Your Rent Prorated
If you’re planning to move in or out of your rental after the first day or before the last day of the month, your landlord may offer to prorate your rent. There could also be a section on prorated rent in the lease agreement. Or if you’re lucky, it could even be laid out in the laws for your area.
If not, you can try asking for a prorated price. Again, it’s a good idea to have this in writing. But remember, unless it’s stated in the lease or local laws, the landlord isn’t required to prorate rent. This is especially true if you’re asking for prorated rent on move out, when the move-out date is earlier than what you previously agreed to.
In this case, the landlord may very well require that you pay for the full month that you committed to.
How to Calculate Prorated Rent
If your landlord has agreed to prorate rent, you’ll still need to establish a prorated amount. Here’s how to figure out prorated rent.
Find Out the Daily Rental Rate
There are numerous online tools for this, but they all use the same method, which is fairly simple. The first step in figuring out your prorated portion is determining how much rent you pay per day. There are several ways to do this – and each landlord may have their own preference.
Daily rent can be calculated by the:
- Number of days in the current month
- Number of days in the average month
- Number of days in a “banker’s month”
- Number of days in the year
Let’s work through each using an example for a monthly rent of $1,000.
If calculating by the current month and there are 31 days in that month, you’ll divide 1000/31. This gives you a daily rate of $32.26.
If calculating by the number of days in the average month, which is 30.42, you will divide 1000/30.42 to get a daily rate of $32.87.
If calculating by a banker’s month, which is 30 days, you’ll divide 1000/30 to get a daily rate of $33.33.
Finally, if you want the most exact calculation, you can divide the total yearly rent by the number of days in the year. So, you’ll multiply 1000 x 12 to get your yearly rent, which is $12,000. You’ll then divide by the number of days in a year. That’s 12000/365, which is $32.87. Notice that this gives the same daily rate as the average month calculation, but this would change slightly during a leap year, which has one extra day.
You should also keep in mind that a calculation for the current month will change depending on the month. February, with 28 days, would actually be the most expensive month per day, while a month with 31 days, like August, will have the cheapest daily rate.
The method of calculation you choose depends on your agreement with the landlord or what it says in the lease.
Find Out the Prorated Portion
Now that you have a daily rate, calculating your rent for the prorated month is as simple as multiplying the daily rate by the number of days you’ll be using the rental.
So, if you’ll be staying from the 1st to the 10th, or 10 days, you’ll multiply the daily rate by ten. Ex:
10 x 32.87 = $328.70
Or if you’re staying 21 days with a daily rate of $33.33, your calculations will look like:
21 x 33.33 = $699.93
How to Prorate Rent for the Month
Once you know how much you’ll be paying for the prorated month, there’s the issue of when to pay it.
Most landlords require the first month’s rent be paid in full when you move in. In that case, after paying a full month’s rent when you move in, in the second month you’d be paying essentially what is the prorated rent, meaning the amount for the first month. In other words, if you moved in on March 12th, you’d still pay for the full month of March to meet your requirement for first month’s rent at move-in, but then you’d pay only the prorated amount (from the 12th until the end of the month) in April. Then, in May, you’d resume paying the full monthly rent.
When moving out, prorating rent is usually a little less complicated. You’d simply pay the prorated amount at the beginning of the last month.
Now that we’ve cleared this up, you should be armed with the confidence to tackle the tricky situation of moving in between rent due dates. Head on over to RENTCafe.com and find your next apartment.