When you pay prorated rent, it means you’re paying for the exact days you live in a rental unit, rather than paying for the entire month. It’s usually used for renters who will move in or out mid-month. Prorated rent is not always an option, but you can discuss with your landlord to see if this scenario applies to you.
What is prorated rent?
The definition of “prorated” is “to divide proportionately, as to reflect an amount of time that is less than the full amount included in an initial arrangement.” In other words, if your landlord expects rent to be paid the first of every month, but you are not moving in until the 10th of the month, for example, you might ask (or your landlord might offer) to pay only for the days you are living there.
When to ask for prorated rent
Before you move in
Your landlord will probably be most agreeable to prorating your rent at lease-signing time. Let’s say the rental unit is available April 1, and you want to rent it, but you can’t move in until April 10. This is when you might want to ask your landlord if they’ll prorate your rent so you won’t be stuck paying rent from April 1 to April 9 when you or your belongings aren’t in yet. Rather than risk losing you as a potential tenant, the landlord might agree to prorate your rent. It’s fair, and it starts the relationship off on a good note.
At move-out time
Another time you might want to ask your landlord for prorated rent is if you will be moving out before the end of the month. Let’s say your lease is up on May 31, but you will be moving out May 15. You might want to ask if you can pay from May 1 to May 15 instead of for the whole month.
Landlords typically are not as amenable to this since you have rented the unit until May 31, and most landlords want the full rent you agreed to pay. If you choose to move early, that’s usually on you. The exception is if the landlord already has a tenant ready to move in on when you move out. In this case, most states would require your landlord to prorate your rent – landlords usually are not allowed to double dip by collecting rent from two parties for the same time period.
4 Ways to Calculate Prorated Rent
There are four methods to determine prorated rent. For example purposes, let’s say that rent is $1,500 a month, you will be moving in on May 10, and the landlord agreed to prorate your rent. Here are the four ways to determine your prorated rent for this scenario. Note that you would tweak the numbers to match your exact situation:
1. By exact days of the month
To prorate rent by exact days of the month, you need to determine how many days there are in the month in question. In May, there are 31 days. Here’s how to figure by exact days of the month.
May 10 to May 31 is 22 days – May 10 counts, since you will be moving in that day. You divide $1,500 by 31 days to get $48.39 per day for May. You then multiply $48.39 by 22 days to get $1,064.58. That would be your rent for May, and then you would pay $1,500 every other month moving forward.
(monthly rent / # of days in the month) x # of days occupying the unit = prorated rent amount
2. By exact days of the year
To prorate rent by exact days of the year, you would use 365 days. You might use 366 in a leap year, but for our example we’ll stick with 365 days. Start by multiplying $1,500 (the monthly rent) by 12 months to get $18,000 (the total rent for the year).
You would then divide $18,000 by 365 to get $49.32 per day for the entire year. From there, multiply that number by 22, the number of days in May you’ll be occupying the unit. You end up with $1,085.04 as your prorated rent for May.
(total rent for the year / 365 days in a year) x # of days occupying the unit = prorated rent amount
3. By 30 days
This method is almost exactly like No. 1 above. The only difference is you would treat all months as having 30 days (since it pretty much evens out that way). So instead of using 31 days in this May example, you would use 30 days even though May has 31 days. The formula for a May 10 move-in would then be based on 21 days instead of 22.
You would then divide $1,500 by 30 days to get $50 per day. You then multiply $50 by 21 to get $1,050. That would be your rent for May, and then you would pay $1,500 every other month moving forward.
(monthly rent / 30 days) x # of days occupying the unit = prorated rent amount
4. By average days in a month
Instead of using a 30-day month for every month, you might want to determine the actual average number of days in a month. To do that in a non-leap-year year, you would divide 365 by 12 to get 30.42. You would then divide $1,500 (the rent) by 30.42 to get a daily rate of $49.31.
Similar to No. 2 above, you would then subtract the 9 days in May for a 356-day rental period. You would then multiply 356 by $49.31 to get $17,554.36 to get your yearly rental rate. To determine your monthly rate, you would divide $17,554.36 by 12 to get $1,462.86 per month for the entire year.
(monthly rent / 30.42 days) x # of days occupying the unit = prorated rent amount
Which is the best way to prorate?
There really is no best way to prorate rent. There are slight monetary differences with each method but probably not enough of a difference to matter. If the landlord prefers a particular method, or if state law dictates a certain way that must be used, that way would be the best method of getting this done.
I often prorate rent for my tenants, and when I do, I usually use No. 3 above, the 30-day method, because it’s usually the cleanest and simplest method. But all methods are valid and work well for determining a prorated rent.
Prorated rent as a negotiation tactic
At move-in time
If there is a lot of competition for rentals in your area, you might want to point out to the landlord that while you like their rental unit a lot, there is a nice rental down the street that offers prorated rent. Note that you should be prepared to take that rental down the street if the landlord will not agree to prorate your rent If you like the first unit that much better, you may have to pay the full rent and live with it. Whatever your decision, it doesn’t hurt to ask if the landlord will be willing to prorate your rent.
At move-out time
Moving out early and asking for prorated rent is different from breaking your lease and moving out months early on a year lease, for example. That is another issue (for another blog topic). But moving out, which includes you and all your belongings, a few days or a couple of weeks early could be a time you might want to ask for prorated rent. You benefit, of course, but so can the landlord, who can market and show the unit easier when vacant. And that is usually worth something to the landlord. Again, it doesn’t hurt to ask.
The bottom line
Depending on how many days you want prorated and the amount of rent you pay, you could save some serious change by having your landlord prorate rent. Prorating rent is a common practice, and one that many landlords are agreeable to doing. Now that you know when and how it’s done, you should not be hesitant to at least inquire if prorated rent is a possibility.