If you got into real estate to generate more income, you're not alone. A lot of Jacksonville, FL, landlords make the big bucks, and learning about prorated rent is one way to do that.
If you have a tenant ready to move in and a rental property ready to be moved into, why wait until the first of the month? Property managers can help you calculate prorated rent. You can also use this guide to learn how.
Keep reading to learn more.
What Is Prorated Rent?
Prorated rent is the amount you can charge a tenant for how long they occupy the unit. This amount is based on the monthly rent and can be calculated with that total.
While you don't have to charge prorated rent for tenants who move in on the first of the month, you can charge prorated rent for those who want to move in early. This is also acceptable for tenants who want to move out later than their lease indicates.
Monthly rent is prorated by the day. After tenants pay the prorated amount, you can make the rent payable on the first of the month thereafter. This can help you keep all of your units on the same schedule.
The best property managers will put rent collection practices in place to help you with a consistent cash flow.
Calculating Prorated Rent
Learning how to calculate prorated rent can help you increase your rental income to generate passive income over time.
Take the monthly rent amount for your rental property and divide it by the number of days in a month. Since the days of the month vary, this calculation can change. You'll multiply that amount by the number of days the tenant stays in the unit.
As an example, let's say it's the month of September, which has 30 days, and the full rent amount for a month is $2,000. The tenant is moving in on the 27th, so they will occupy the unit for three days. The calculation would look like this:
- 2000/30 x 3 = 200
This equation can be beneficial for renting to tenants who have a month-to-month rental agreement.
Creating a Prorated Rent Policy
A property management company can help you create a prorated rent policy. Having your policy in writing can eliminate the risk of disputes with tenants down the line.
Incorporate the prorated rent amount into your leasing contract. Property managers can work with legal professionals to ensure your rental agreements are legally binding.
Keep in mind that prorating rent is not required for tenants who choose to move in later than the lease date begins. The same thing applies to those who want to move out earlier than the end date on their lease.
Let Our Property Managers Help You
Property managers can calculate prorated rent for you using the calculations and tips in this guide, but they do more than that.
At Round Table Realty Property Management, we have more than 40 years of experience helping landlords like you in Jacksonville, Florida. We work hard to provide landlords with tenants who pay rent on time.
We have a "People Before Property" mindset to help you and your tenants benefit from a mutual relationship. Contact us today to start exceeding your real estate investment goals.
