The dynamics of the real estate market have changed many things. Rising home prices and high-interest rates are putting ownership out of reach for many. Just four percent of Generation Z owns a home and many are moving back in with their parents.
The rental market has benefitted from these dynamics. More people are choosing to rent because there are so many barriers to entry with ownership.
As new tenants start their lease, it is important they understand their options. For example, property managers can offer prorated rent if you move in during the middle of the month.
Read on to learn the meaning of prorated rent.
When Is the Rent Due?
Traditionally, rent was due on the 1st or 15th of the month. This aligns with many employers' payment schedules or the receipt of government benefits.
Digital banking has changed this for many. Now, many workers receive direct deposits every two weeks.
The due date for rent is spelled out in the rental agreement. Some renters wonder what happens when their rent is due on the 1st of the month but they move in a week or two later. This situation may call for prorated rent.
What Is the Meaning of Prorated Rent?
Prorated rent is essentially a partial payment. It is appropriate when a tenant is moving in or out during the middle of a rental cycle.
Property managers would prefer that tenants move in or out around their rental due date. Things do not always work out this way and a fair system is in place for that.
How Is Prorated Rent Calculated?
It is easy to calculate prorated rent. Basically, your total rent is divided by the number of days in the month. The rental cost per day is the output of that calculation.
Next, you determine how many days the tenant is going to stay in the property that month. Consider a situation in which the tenant is moving out on the 10th of the month. You will then multiply the rental cost per day by ten days of rent.
If this does not make sense for you there are other methods. There are also prorated rent calculators available online.
How to Pay Rent?
Paying the rent is the final piece of the puzzle. There are many ways to pay the rent and they belong in the rental agreement.
Some property managers require you to make online payments on their website. They are able to set up auto-pay so the rent is withdrawn on the due date each month.
Some properties still prefer cash or checks. There are other landlords that take modern payment forms like Venmo. Rent collection ultimately varies depending on the property.
Your Guide to Prorated Rent
Prorated rent is an option for tenants moving in or out during the middle of a cycle. It would not be equitable for a tenant to pay full price if they were not staying the whole month. However, there are circumstances where an entire month's rent is still necessary.
If you have more questions about the meaning of prorated rent, contact us today to speak with an experienced property manager.
