What Does Prorated Rent Mean?
Prorated rent is a portion of the full monthly rent that is based on the number of days a tenant occupies a property. Proprated rent is due when a tenant occupies a residence for a partial term, such as a few days or a week.
You typically pay prorated rent when you need to occupy an apartment for several days in addition to the standard monthly term of your lease. This usually happens at the beginning or end of a lease when a tenant may need to move in or out a few days before or after the first of the month. For example, if you move into a new apartment on the 20th of the month, you’ll need to pay prorated rent for the days you occupy the residence before the first full month of your lease begins.
Similarly, if your lease ends on the 30th or 31st and you can only move out on a later date such as the 5th of the month, prorated rent would be due. You would pay prorated rent for the additional 5 days you plan on occupying the unit outside of the monthly leasing period. In this situation, paying prorated rent means you're paying for the additional days you're spending living in the apartment.
When Do You Pay Prorated Rent
You pay prorated rent whenever you occupy an apartment for less than an entire month. By paying the prorated rate, you will only pay for the days you are actually using the apartment, rather than having to pay for the full month.
When Do You Pay Prorated Rent?
Prorated rent is typically paid at the beginning or end of a lease, to accommodate tenants based on when they need to move in. As landlords prefer to start leases on the 1st of the month, if a tenant wants to move in early they will need to pay prorated rent for the extra days they'll occupy the apartment. This also applies to tenants who need to move out a few days after their lease ends.
How To Calculate Prorated Rent?
There are two different ways to calculate prorated rent, monthly and yearly. The monthly method of calculating prorated rent is easier and faster, but the yearly method is more accurate.
1. By Number of Days in a Month
To calculate prorated rent on a monthly basis, take the total rent and divide it by the number of days in the month. This will give you the daily rate, which you can multiply by the number of days you’ll be occupying the unit.
For example, the rent is $1,500, and you move in on April 15th. You would calculate the daily rate by dividing 1500 by 30.
$1500 / 30 = $50
So, it costs $50 a day to rent an apartment in the month of April. You then multiply that number by the number of extra days you’ll occupy the unit (15).
$50 x 15 = $750
So, you would owe $750 in prorated rent, which makes perfect sense because you are occupying the unit for exactly half of the month.
2. By Number of Days in a Year
But, because the number of days in a month fluctuates, the daily rate will vary from month to month. So, some landlords may choose to calculate the prorated month on a yearly basis. To do so, you would take the annual rent (or your monthly rent x 12). Take that number and divide it by 365 for every day in the year. That will give you the daily rate based on an annual schedule. Then multiply that rate by the number of days you plan on occupying the unit.
So, let’s use the same example.
$1,500 x 12 = $18,000 (the annual rent of the apartment)
$18,000 / 365 = $49.32 (the daily rent of the apartment)
$49.32 x 15 = $739.80 (the amount of prorated rent you owe)
So, as you can see, the difference is only about $10. But calculating the prorated rent on a yearly basis will give you a more accurate estimation than monthly because the number of days in a year doesn’t fluctuate (except in a leap year).
Prorated Rent Example
Here's an example of how prorated rent works: A tenant is renting an apartment from a landlord and paying $3,000 a month in rent. Their lease ends on May 31, but they need to stay in the apartment for until June 10, so the landlord will charge them $1,000 prorated rent for the period between June 1 and June 10. The get the prorated rent you first need to calculate the daily rental rate and multiply that by the number of days the property is being used.
Tips To Keep In Mind When Prorating Rent
Calculating prorated rent is relatively simple and can be a helpful way to negotiate an early move-in date. But there are a few things you should keep in mind.
- Prorated rent typically applies to rent paid before your official lease term. If you move in after the 1st, you are still on the hook to pay the entire month’s rent unless you and the landlord agree to start the term on the 1st of the following month.
- Make sure all rent you owe is outlined in the lease, including any prorated rent.
- If you have to extend your lease past the original term but don’t want to renew for an entire year, ask the landlord for a month-to-month lease. Even if you pay them prorated rent for the additional days you occupy the unit, it’s still wise to have a lease in place to avoid problems.
Prorated Rent Bottom Line
It's important to prorate rent if you need to move into an apartment a few days early or stay a few days past your lease. Paying prorated rent means you are only paying for the days you are living in the apartment, which ensures that everyone is getting a fair deal. Without prorating rent, you'd have to pay for the entire month, including days in which you aren't using the property, which would be a waste of money.