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All You Should Know About New Renters’ Prorated Rent

Updated: Jun 9, 2022

Usually property owners have to handle the matter of prorated rent. It is defined as the rent calculated for the days the unit was occupied by the renter. There can be a number of reasons for prorating the rent like renters only wanting to pay for the particular days they occupy the apartment.

If a tenant is moving in or out of a rental unit after the start of the month, they would usually want to pay lesser amount from the whole month’s rent. For such cases, normally the proportion of the monthly rent is calculated according to the total days the unit was occupied.

Prorating the rent rate is quite useful for renter; however it causes more work for the property owner. This becomes complicated to collect rents on different schedules if the landlord has more than a couple of units. Still there can be a number of pros of prorating rent. Some of these advantages can be seen below- with the tricks to manage the proration of rent.

Prorated rent-meaning

It means that the renter can pay rent for a specific number of days of the month, calculated on the basis of the days they live in the unit. Mostly, it should take place at the time of signing the agreement. It can be calculated by dividing the monthly rent by the days in the month and multiplying by the days the unit was occupied.

Calculating the prorated rent

Prorated rent can be calculated using a number of methods. One method could be prorating rent using the actual days in the said month, so the rate per day would be different for every month. Other ways are to use the average number of days for a month (30.42), or days in a banker’s month (30 days), or the based on a year.

If you are prorating rent on the basis of the days of the month, and the renter moved-in on May 16 in a unit with $1500 monthly rent. This means they will occupy the unit for 16 days in May- the daily rent is $48.39 (1,500 ÷ 31 = 48.39). Hence, the prorated rent for the occupancy days would be $774.2 (48.39 x 16 = 774.2).

You can also include a clause in the agreement for the rent of last month for the cases when you have to calculate a prorated rate for the tenancy term ending before the month end or if the renter vacates the unit before the end of lease term due to any valid reason. The prorated rent for the last month is also calculated in the same way as explained above. It is important to include the clause related to prorated rent rate in the rental agreement.

Advantages of prorating rent

While it is much easier to collect a monthly rent on a fixed rate, solid reasons exist for a landlord to allow renters to pay prorated rent.

1. Getting a tenant quickly

There is a greater chance to get a tenant if you offer a prorated rent rate. This flexibility attracts renters to move-in even before a new month starts. Tenants usually choose the unit which costs less to move-in.

2. More cash flow

One misconception about prorating is that you lose money with it; instead it gets you more profit. If you allow a tenant to pay for the days they occupy the unit, they will happily move-in right away- increasing your overall rental income. Your property has few to zero vacant days and hence you get the most value out of it.

3. Good reputation for the landlord

As a landlord you can build a good reputation and trust among tenants by offering a prorated rent policy. Showing flexibility for moving in and out to the renters builds a solid relationship between you and your tenant. However, you need to be vigilant while jotting down the lease agreement to follow all the rules and regulations. You should get a lease agreement signed, collect the first month rent and security amount, before you let anyone in your property.

4. Knowledge about flexible rent.

Property owners tend to allow tenants to pay rent weekly or bi-weekly. This is a suitable solution for tenants who are freelancing or working independently as they can have a manageable payment schedule of smaller amounts. This also helps reduce late payments and saves you from the hassle of collecting late fees.

If the landlord is already following prorated rent rates for first and last months, it gets easier to chalk out a weekly or bi-weekly rent payment plan according to requirement. It should be kept in mind that allowing flexible rent collection and making a payment schedule for a renter with rental debts are very different.

Tools used in calculating prorated rent

A simple method for calculating prorated rent is using a reliable property managing software or an app that is meant for property rent collection. A convenient function to calculate prorated rate for rent is usually included in most rent collection apps. This can make your life much easy if you are the owner of multiple properties on rent. These apps are not only useful for setting up flexible rent payment plans, but also help you collect advance rent, or split rent amount between roommates.


Flexible rent rates and payment schedules are always an attraction for renters who are not financially stable. As a landlord, if you offer a prorated rent plan, you can build a good working relation with your tenants. Unlike general concept, it is quite simple to calculate prorated rent amount. It can not only help decrease the time your rental unit remains vacant but also increase your overall rental earnings. It can also be a plus point for you as a landlord as it sets you apart from the other property owners in your area.


Justin Brennan

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