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Are you actively searching for a new rental home?  Moving can be expensive.  Security deposits.  Application fees.  Screen reports. Pet deposits.  And a full month of rent.  All paid upfront.

What if you move mid-month?  Will you owe the full rent?

Luckily for you, there is a way to reduce the first or last month’s rent.  Prorated rent!

Prorated rent is a partial rent payment that both the renters and landlords agree.

Let’s learn more about prorating rent and helping reduce your first month’s rent.

Suggested reading:

What is prorated rent?

Prorated rent is a partial rent payment based on the number of days you occupy the rental in the first month.  If you move in on the 18th of the month, your prorated rent would only equal 12-days’ worth.

While prorated rent is beneficial for moving in, it also works for moving out.  Tenants only pay for the days occupied, starting from the 1st and ending on move-out date.  Landlords might request the tenants to exit the rental earlier, tenants must approve.  Or, renters may decide to move out early to another property and prefer to minimize the duration paying two rents simultaneously.

When can you request prorated rent?

This is only effective for two periods of renting: first and last month.

Most common lease dates start on the first of the month.  Therefore, if you move in after the first day or move out before the last day, prorating rent can be beneficial.

It is important to note prorated rent in the lease agreements.  This protects both landlords and tenants.

How should you ask for prorated rent?

The time to request prorating is always before the lease is signed.

Once a lease is executed, both parties have a binding legal agreement to the terms.  Requesting to prorate the last month and it is not in the lease?  Make a request when you provide your move-out notice (30 or 60 days).

Ask landlords and managers politely.  Ultimately it is their decision to allow.  There is no guarantee or obligation to approve prorated rent.

The earlier you request will always be best.

 

How to calculate prorated rent?

Prorated rent is based on the percentage of the month you will live in the rental.  There are two ways to calculate prorated rent, number of days in a month or year.  Both require math to determine the daily calculation.

Here is how to prorate rent.

Prorated on Numbers of Days in a Month

To figure out your daily rate, take your rent amount and divide it by the total number of days in the month.

Yes, there are months with 28, 30 and 31 days.

Example: 

Renter moves in on the 17th of April, which has 30 days.  Rent is $1,200.

Daily Rate = Rent $1,200 / 30 days.  $40 per day.

Days Occupied = 30 days – 17 days (unoccupied).  13 days occupied.

Prorated April rent = $40/day x 13 days.  $520

Prorated on Number of Days in a Year

Similar math.  Determine the annual amount of rent, 12 x rent.  Dive your annual rent by 365 days.

This equals your daily rate.

Example: 

Renter moves in on the 17th of April, which has 30 days.  Rent is $1,200.

Annual Rent = Rent $1,200 x 12 months.  $1,440 per year.

Daily Rate = $1,440 annual rent / 365-days.  $39.45 per day.

Days Occupied = 30 days – 17 days (unoccupied).  13 days occupied.

Prorated April rent = $39.45/day x 13 days.  $513

Should you prorate rent 30 or 31 days?

This depends on the method you use to prorate rent.

    • Days in a Month: Use the actual number of days in the month.  For February, use 28 days.  Or 29 if it’s a leap year!
    • Days in a Year: No effect. Since the daily rate is based off 365 days, it does not matter.

Do not be greedy

Yes, there will be a difference in pricing.  Based on the previous example, if rent is prorated on Days in a Year there is a difference of $7.

Months with 30 days and February will have a higher total.  Months with 31 days will have a lower total.

Understand the difference is minimal compared to rent.  Do not argue over the $10-20 difference.  Remember the landlords are offering prorated rent for the benefit of renters.

Remember how much you are saving.  Savings in our example was $680! Do not get greedy.  Be appreciative.

Study / Review your lease

If a lease agreement has not yet been signed, make sure to review for prorated clauses.

Management companies prefer to prorate so all renters have the same rent due dates.  This makes managing easier so they can bulk perform their rent collection.

Even if the lease agreement does not have a prorated clause, they can be added.  After the lease has been signed, it will require a lease addendum stating the prorated terms.

The legality of prorated rent

Prorating rent is legal but required.  Although there are no nationwide tenant rights regarding prorated rent.  Your specific state or local municipality might have their own prorated policies.  It is important to research your Landlord Tenant Laws.

Landlords and property managers may refuse prorating prior to signing the lease.  However, if prorating is included in the lease then they must honor their agreement.

For some landlords, offering prorated rent is the first step to starting a respectful business relationship.  Important to be a good landlord.

Recap

Prorated rent is a great opportunity to reduce your first and last month rent.  There are no legal requirements from landlords, the decision is ultimately theirs.  When allowed, confirm the lease agreement has it included.  If prorating is added after the lease was signed, ask for a lease addendum.

When setting up rent payments, a software like Burbz can help calculate prorated rent.

Be polite and patient with landlords when requesting.  Kindness will go a long way.

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