How to Prorate Rent
If you don’t move in at the start of the month, your landlord may prorate rent for your first month. The reason for this is pretty simple: if you aren’t occupying the home for the full month, you shouldn’t have to pay the rent for the entire month.
It’s a good idea, but how exactly do you calculate the prorated rent? If you know how to do it, you can better prepare for what you need to pay. Here are the two ways you can prorate rent, so you know what to expect.
Prorate rent by month
Prorating by month is the most common method, mostly because it’s the easiest to calculate.
To get the right number, divide your monthly rent by the number of days in the month. That gives you a daily rental rate for that month. Then, multiply that rate by the number of days you’re occupying your home in the month. That gives you the prorated rental rate.
Let’s say that your monthly rent is $900 and you move in on September 10th. Since there are 30 days in September, your daily rent for that month is $30. You’re occupying the home from September 10th to the 30th, which comes out to 21 days. Rent for 21 days at $30 a day is $630, so that would be your prorated rent for that month.
Prorate rent by year
More rarely, rent may be prorated by the year. The math here is a little bit more involved, and therefore is used less.
First, you multiply the monthly rent by 12, to get the cost per year. Divide that by 365 (or 366 in a leap year) to get a daily rental rate, then multiply that by the number of days you’re occupying your home for.
Let’s take the same example as above, $900/month in rent and moving in on September 10th. Multiplying $900 by 12 gives $10,800 a year in rent, and dividing that by 365 gives a rental cost of $29.59/day. Multiply that by the 21 days you’re living there and you get a prorated cost of $621.39.
The cost of prorating with different methods varies, as this demonstration shows. In months with 31 days, yearly proration will cost more, while monthly proration costs more in other months. But whichever is used, now you know how to prorate rent and can be prepared for exactly how much you need to pay.