Prorating rent involves calculating a portion of the monthly rent to reflect the number of days a tenant will be occupying the property within a given month. This is commonly done when a tenant moves in or out of a rental property on a day other than the first or last day of the month. Prorating ensures that both the tenant and the landlord pay or receive the appropriate amount of rent based on the actual occupancy period.

Here’s how to prorate rent step by step:

1. Determine the Full Monthly Rent: Start by determining the full monthly rent amount that the tenant would pay if they occupied the property for the entire month.

2. Count the Number of Days: Count the number of days the tenant will be in the property for the prorated month. This includes the move-in day but not the move-out day if they are leaving.

3. Calculate the Daily Rent: Divide the full monthly rent by the number of days in the month to get the daily rent amount. The formula is:

Daily Rent = Full Monthly Rent / Number of Days in the Month

4. Calculate the Prorated Rent: Multiply the daily rent by the number of days the tenant will be occupying the property. This will give you the prorated rent amount for that specific period. The formula is:

Prorated Rent = Daily Rent x Number of Occupied Days

5. Examples:

a. Move-In Proration: Suppose the monthly rent is $1,200, and the tenant moves in on the 15th of a 30-day month.

  • Daily Rent = $1,200 / 30 = $40
  • Prorated Rent = $40 x 16 (15th to 30th) = $640

The tenant would pay $640 as prorated rent for that month.

b. Move-Out Proration: If the tenant is moving out on the 20th of a 30-day month, you would prorate up to the 19th, assuming the tenant has already paid for the full month.

  • Daily Rent = $1,200 / 30 = $40
  • Prorated Rent = $40 x 19 (1st to 19th) = $760

In this case, the tenant would be entitled to a refund of $440 ($1,200 – $760) for the unoccupied days.

6. Communicate Clearly: When prorating rent, it’s crucial to communicate the prorated amount to the tenant and ensure both parties understand the calculation. Provide a breakdown of how you arrived at the prorated rent amount to avoid any confusion.

Prorating rent is a fair way to adjust rent payments when tenants move in or out of a property mid-month. By following these steps and providing clear communication, you can accurately calculate and collect prorated rent.