According to recent data, fair market rent for a two-bedroom apartment in Punta Gorda, Florida, is $1,142. While this gives excellent insight as to how much to expect when renting properties in this area, it's a guideline for staying as a tenant for an entire month.
What if a tenant is only renting for a portion of the month? Renters do not always move in on the first day of the month or leave on the last day.
Property managers are excellent resources for helping landlords prorate rent. Still, it is crucial to understand how they do the math. Keep reading for a full scoop.
What Does It Mean?
A property management company can prorate rent if the renter needs the landlord to divide the per-day cost from the monthly rent cost. In this scenario, the tenant pays by the day, not the entire month. You would want to do this only at times when a renter is staying at the property for less than 30 days.
How to Prorate Rent
While property management software can help do the math, you want to understand how to reach this amount. You can also use a spreadsheet or a free online calculator, but regardless of the available tools, this is the formula that a property manager uses.
How to Calculate Daily Rent
First, you divide the amount of monthly rent by the number of days for the month it affects. It is essential to note how many days are in the month you are calculating for, such as 28, 30, or 31. For a February Leap Year, you would divide by 29 days.
Next, multiply by the amount you found, or the daily rent amount, by how many days the renter is living in the property that month. For instance, if the daily amount is $30, and the tenant is staying for only 15 days, you multiply $30 by 15 for a total of $450. Here, you get the prorated amount.
Prorating Rent By Year
While prorating for the month is common, some people prefer prorating for the year. For this method, every day of the year is the baseline for an equal rate day. You would use this in cases of a year-long lease.
In this scenario, you multiply the monthly rent by the number of months, which is 12. Divide the product you get by 365, which is the number of days in the year. Finally, multiply the amount you find as the daily rate by how many days the renter must pay for.
Collecting Prorated Rent
Property management companies are highly beneficial for helping landlords collect timely rent, especially in instances where the rent is prorated because it can get confusing. Here is an excellent example.
A new tenant signs a lease and pays the property management company a security deposit. Then, the tenant moves in on March 10th. The prorated rent for 22 days is due April 1st.
Property Managers Are the Best Resource
Finding the prorated rent amount for a partial month can get tricky. Professional property managers, like PMI Heartland Realty, have the experience and resources to do this for landlords and so much more.
That is because, with PMI Heartland Realty, you get a full-service real estate asset management partner with state-of-the-art technology. They give unmatched service to property owners, letting them know, in real-time, how their investments are doing.
Contact PMI Heartland Realty today to learn more.
