As rental vacancies begin a slow upward trend, landlords must focus more than ever on attracting new tenants to vacant properties. So, as a landlord, you might need to practice some flexibility with rent payment adjustments.
We're not suggesting that you allow tenants to stay for free, only that you should accommodate new tenants who don't necessarily want to occupy and pay on the first of the month. If you receive an application from an approved tenant who wants to move in before or after the month ends, it makes sense to charge them prorated rent instead of turning them away.
Read on while we simplify the math behind these rental agreements to help you ease the transition process and prepare to welcome your new tenants.
What Is Prorated Rent?
Prorated rent is a method used to divide total rental costs based on the number of days a tenant occupies a property in a specific billing cycle. It is especially useful for new tenants but also sometimes applies to existing tenants who move out before their lease ends.
Prorated rent benefits include:
- Ensures fairness in rental agreements.
- Avoids inequitable charges when tenants occupy units for only part of the month.
- Streamlines moving processes for tenants and landlords alike.
Understanding how to determine prorated amounts accurately is invaluable for maximizing rental occupancy.
How to Calculate Prorated Rent
Explaining prorated rent calculations in simple steps makes it easier to understand. Try these prorated rent calculator steps:
- Identify the total monthly rent amount agreed upon in the lease.
- Calculate daily rent by dividing the monthly rent by the number of days in the month.
- Determine how many days the tenant will occupy the rental during the month.
- Multiply the daily rent by the number of occupied days.
This simple formula ensures tenants only pay for the days they use the property, ensuring fairness.
When Is Prorated Rent Applicable?
Prorated rent typically comes into play under various circumstances:
- Moving in on a day other than the first of the month.
- Vacating the unit before the lease officially ends.
- Rent adjustments due to lease changes made mid-cycle.
Understanding when prorated rent applies helps tenants and landlords better navigate their rental agreements, ensuring clarity and fairness. In Tacoma, landlords aren't legally obligated to calculate prorated rent for tenants who break their lease early, but it's a good idea to do this so your tenant may leave on good terms.
Working with a full-service property management company in the Tacoma, Washington, area can help ease the complications associated with these situations and many others.
Final Thoughts on Prorated Rent
Mastering the concept of prorated rent ensures that both tenants and property managers maintain fairness within rental situations. Embracing this practice creates a smoother transition for tenants and gets your relationship off to a positive start. For departing tenants, it can be a show of goodwill.
PMI South Sound helps landlords manage these unusual situations and the day-to-day operations of their rental businesses. Our services include everything you need to cope as a landlord, and our experience ensures you thrive in the competitive Tacoma real estate market.
We offer tailored support to suit every client's unique needs, coupled with prompt, attentive service. Reach out to experience the ease of knowing that every detail is handled professionally.
