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Tips & Guides / Leases

What Is Prorated Rent?

By Bri Hand

In an ideal world, you’d move into your new rental home exactly on the first of the month, the day most landlords charge rent.

However, life’s rarely that simple. Sometimes jobs or housing repairs prevent you from calling your new place “home” right on day one and you aren’t able to move into your new home until the fourth, 12th, or even 25th day of the month. 

The good news is that most landlords won’t charge you a full month’s rent. Instead, they’ll charge you prorated rent, a portion of the monthly cost. But what does prorated rent mean, exactly, and what goes into its calculation? Follow along to learn all you need to know about prorated rent, including:

  • What is prorated rent?
  • How to get rent prorated
  • How to calculate prorated rent
  • The legality of prorated rent

What is prorated rent?

So, what is prorated rent? Prorated rent refers to the portion of rent a tenant pays based on the number of days they actually occupied a home. Derived from the Latin pro rata, prorated rent is a fair way to charge a renter who can’t move in right at the beginning of their lease agreement—especially if the different move-in date was out of their control.

While the landlord is often losing money by prorating rent, prorating rent greatly benefits the renter of the space because it:

  • Saves you money: Prorated rent means you only pay for the days you occupy a home. This saves you money because you’re only paying a portion of the rent, not the full month’s rent.
  • Lets you know who your landlord is: If your landlord charges you a full month’s rent even though you aren’t able to occupy your home for the full month, chances are your landlord will be inflexible when it comes to other issues. What’s more, this signifies a landlord who may be concerned with squeezing as much money from you as possible. Either way, it’s good to know this information up front.

Although the landlord isn’t receiving a full month’s rent from the tenant, they do benefit from providing a prorated rent in the following ways:

  • Relationship building: Prorating rent is a fantastic way for a landlord to show a new tenant that they’re willing to work with them and build a relationship on trust and fairness.
  • Locks in the perfect tenant: Working with a good tenant has another advantage—it entices the new tenant to stick around even if they can’t move in on time. Finding good tenants is hard. It’s often better to give a good tenant a break rather than finding a new, potentially bad, tenant to take their place who will move in on the right move-in date.

How to get rent prorated

The first step to getting your rent prorated is to think about why you’re asking for prorated rent in the first place.

For instance, if you’d like to move 10 days earlier than your official rental period to get situated in a new city before starting a new job, it may be better just to pay for the full month’s rent. However, if your old job isn’t allowing you to move until eight days after your new lease term starts, it’s perfectly fine to ask for prorated rent for the first month.

Asking your landlord for prorated rent may seem like a stressful conversation to have, but you can ease the stress by following the below tips:

  • The best time to ask for prorated rent is before the lease is signed. This helps codify the arrangement before the first month of your lease starts.

Fortunately, Landing offers flexible, short-term leases in which you pay by the duration of your stay—not by the rent stipulated in a long-term lease for the rental unit.

How to calculate prorated rent

Prorating rent is fairly straightforward. That said, it’s important to calculate prorated rent fairly and accurately. The last thing you want is to pay more or less than the prorated rent amounts formula dictates.

In general, all methods of prorating rent follow the same two steps:

  1. Determine the daily rent rate
  2. Multiply the number of days the tenant occupied (or will occupy)

However, there are four ways of determining the daily rental rate that impacts how much you can expect to pay:

  • Days in a year method
  • Days in a specific month method
  • Days in an average month method
  • Banker’s month method

Days in a year method

To calculate the daily rate (and thus the overall prorated rent) using the days in a year method, multiply the monthly rent by 12 and divide that number by the days in a year (365).

For example, if a month’s rent collection is $1,000, the daily rate is $32.87 (12,000 / 365). Then, simply multiply this daily rate by the number of days the tenant will occupy the home. If you only occupy the home for 20 days in August, your prorated rent is $657.40.

Days in a specific month method

Most useful in a short-term or month-to-month lease agreement, this method relies on the specific month to yield a month-specific daily rate. To calculate the daily rate, divide the monthly rate by the total number of days in the month in question.

For instance, if your total monthly rent is $1,000, the daily rate for August is $32.25. Again, multiply this daily rate by the number of days you will occupy the home. If you occupy the home for only 20 days in August, your prorated rent payment is $645.

Remember: Certain months will yield different rates. If the month in question is February during a leap year, the daily rate will be $34.48 (1,000/29).

Days in an average month method

Similar to the “days in a specific month” method, this method calculates the daily rate based on the days of the month. However, unlike the previous method, this method uses the average number of days in a month (30.42 days) to calculate the daily rate.

For instance, using this method, a tenant who only occupied their home for 20 days in August (monthly rent payment is $1,000) would pay a prorated rent of $657.46 ([1,000/30.42] x 20).

Banker’s month method

This method relies on rental property standardization. Rather than using the average days in a month to calculate the daily rental rate, this approach simply divides the monthly rent by 30 (the number of days in “Banker’s month”).

For example, a tenant whose monthly rent is $1,000 who only occupied their new home for 20 days in August would pay a prorated rent of $666.66 ([1,000/30] x 20).

It’s best to know your landlord’s method for calculating prorated rent up front.  Some states have different laws regarding the legal method behind prorated rents. 

The legality of prorated rent

Although there are no national laws when it comes to prorating rent, many states have regulations pertaining to the tenant-landlord relationship that sometimes includes methods for prorating rent.

For instance, in California, it’s common practice to use the Banker’s month method when prorating rent. However, in Texas, landlords generally use the days in a specific month method.

Again, it must be said that landlords aren’t legally obligated to prorate your rent for any reason. While some landlords may be lenient, others may expect you to pay the full month’s rent for your first month regardless of how many days you occupy your home. If this is the case, failure to pay your rent will result in a breach of contract.

If you’re a tenant asking for prorated rent, it’s best to ask in the most polite, formal way possible. Write your landlord a letter explaining your situation and why prorated rent is the best strategy for the month in question. 

Rent an easier way with Landing

Moving can be filled with tough decisions—not only do you have to think about moving costs, but if you plan on occupying your home after your lease starts, you also have to consider asking for prorated rent.  

Fortunately, there’s a way around all of those inflexible, long-term leases: Landing. With Landing, you can find fully furnished apartments with flexible, short-term leases around the country to lease on your own terms. Learn more about Landing today!

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Bri Hand published on September 30, 2021