Rent prices are at some of their highest ever. Across the United States, the average American pays about $1,300 in rent.
Property managers know all too well that rent can be a pain point. It creates bad feelings when you give late charges, or when the security deposit - two months of rent - needs to be absorbed for repairs.
This can make it especially problematic when a tenant is paying a full rent price even without living there full time. Fret not, because there's a solution here to save the day: prorated rent.
What is prorated rent, and how do you calculate it? We will answer these questions and more in today's article.
What Is Prorated Rent?
A ton of myths circulate about property management. One of them is that tenants live on your rental property on the exact dates from when a lease begins to when it ends. In many cases, they arrive slightly after and leave slightly before - and sometimes stay after the lease expires.
This could create a potential dilemma since it's unfair to them to pay full price for something they aren't using. That's where prorated rent may help. As the name implies, this is where rent is prorated so that a tenant only pays a portion rather than the full amount.
So, suppose they want to stay for an extra 25 days while they hunt for a new place. Instead of paying the full amount, they could pay the daily average rent multiplied by the days they're staying.
It's a common trend in the real estate industry that gives a fair shake to tenants and landlords. They pay a reasonable amount, and you still get rental income.
How to Calculate Prorated Rent
Calculating prorated rent is easy. Simply find the average daily rental rate for your Virginia property.
You can find this number by dividing the entire yearly rental cost by the days of the year. Or, you can divide the rent for a specific month by the days in that month.
Then, you take this daily rental rate and multiply it by the number of days that a person wishes to stay. Simple, right? This makes it easier to arrange when a tenant remains after the lease expires on a month-by-month basis.
Should You Offer Prorated Rent?
There is no obligation for a landlord to offer prorated rent, especially as it concerns an existing lease. Tenants agree to pay the full amount of rent for a full year, regardless of their situation or changing plans.
However, prorated rent can be a show of goodwill in a difficult situation. It's also a useful means to let your tenant stay on a month-by-month basis after the lease.
Find Property Managers at Chambers Theory
Property managers sometimes give tenants the option to prorate rent, such as if they stay on after a lease. You can calculate this simply by dividing rent (monthly rent or yearly rent) by the days a tenant stays. This is preferable when a tenant overstays after their lease has expired.
Chambers Theory is where you go in Northern Virginia for the best property management, hands down. Our team shares decades of experience, plus dozens of certifications and accolades. Become one of our happy customers by getting an instant rental analysis report.
