Want Prorated Rent To Be Applied? Here's What to Know
It's important to know what prorated rent is especially if you just found the perfect place. Here's how it works and may impact your moving process.
When finding an apartment that's right for you, there are a few things to remember. When looking to move, listing ideal locations, amenities, and close public transport services is important, but above all, the cost of rent is usually the determining factor. Inflation and other socioeconomic factors often affect what you choose.
Once you've found the perfect place, you should be aware of what prorated rent is and how it can impact your moving process. Life can be pretty unpredictable, and even when we think we have everything sorted out, there's always room to re-evaluate moving plans. So what is prorated rent, how is it calculated, and what else should you know? Here are the basics of prorated rent explained.
What is prorated rent?
Prorated rent is an adjusted rate of pay that you owe your landlord, depending on the day you move into your apartment. Simply put, it works in your favor when saving you money on rent. A prorated rent rate is a partial payment that covers the amount of time you've spent living at a particular property.
Prorated rent differs from the traditional practice of month-to-month rent. However, there's no legal obligation for a landlord to consider prorated rent when you choose your move-in date, as prorated rent depends on the landlord you're dealing with. It isn't always a guarantee that landlords will adjust their fees to meet that specific cost, so don't necessarily expect prorated rent if you're planning on moving out early.
Before asking your landlord about prorated rent, review your leasing agreement to see if there's any prior mention in your contract. If there isn't, open a dialogue around the subject and see where they stand on applying a prorate rent charge upon moving in. If they agree to prorate your rent, remeber to get it in writing.
How do I calculate prorated rent?
Now that you know what prorated rent is, it's important to understand how to calculate your adjusted rent. According to Apartment List, the mathematical equation for determining your new fees is:
((monthly rent payment)/(number of days in the month)) x (number of days you'll live in the apartment that month) = prorated rent.
The simplest way to calculate your total is to divide your monthly rent by the total days in that month.
From there, multiply that number by the number of days out of the said month that you'll be considered a proper tenant. The new rent total calculated by applying the prorated rent formula should give an adjusted total based on the number of days you'll live in a rented space instead of charging you for an entire month. Not all landlords operate their billing cycles the same way, meaning you may have to tweak your equation to align with when your rent is due.
Apartment List's bill cycle prorated equation is:
((monthly rent payment for month 1)/(number of days in month 1)) x (number of days that you'll be living in the apartment in month 1) + ((monthly rent payment month 2)/(number of days in month 2)) x (number of days that you'll be living in the apartment in month 2) = prorated rent.
Yearly prorated rent is calculated through the:
((monthly rent payment x 12) / 365) x number of days that you're occupying the unit in that billing cycle = prorated rent.
Which prorate equation is best?
When calculating prorate, these mathematical equations usually depend on your situation. Realistically, things boil down to the effect on tenant relationships with their landlord and the lease. Landlords are often profit-minded and may opt for a prorated rent type that will result in the lowest loss for them. They'll go with the subjective choice depending on what has the greatest benefit for their business model. With no prorate regulation set in stone, it's up to the landlords to choose.
Rentec Direct does note that in the United States, there are some laws in place for when landlords collect rent, even though most states do not have regulations over prorated rent. There is no "best" equation to go by, but landlords will choose the fairest prorated rent equation to avoid any conflict with Fair Housing Laws that prohibit discrimination.