How to Calculate Prorated Rent
What is prorated rent?
Simply put, prorated rent is the amount of money you pay for living in a rental for only part of a month. It's calculated based on how many days of the month you live in the rental for.
If you move in with only 10 days left in a month, you don't want to pay the entire month's rent. Prorated rent would have you only paying for the 10 days that you lived in the rental.
The most common ways to calculate prorated rent
Each rental contract is unique — some are month-to-month and others are for a set period of time, such as six months or a year.
Prorate rent by month
Prorating by month is the most common method, mostly because it's the easiest to calculate.
Monthly Rent / Days in Month = Daily Rent
Daily Rent x Number of Days You're Occupying = Monthly Prorated Rent
To get the right number, divide your monthly rent by the number of days in the month. That gives you the 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 Sept. 10. Since there are 30 days in September, your daily rent for that month is $30. You're occupying the home from September 10 to 30, 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.
Step 1: $900 / 30 = $30 per day
Step 2: $30 x 21 = $630
Prorate rent by year
Rent is prorated less by the year since the math is a little bit more involved.
Monthly Rent x 12 = Cost Per Year
Cost Per Year / 365 = Daily Rent
Daily Rent x Number of Days Your Occupying = Yearly Prorated Rent
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.
Let's take the same example as above, $900 a month in rent and moving in on Sept. 10. Multiplying $900 by 12 gives you $10,800 a year in rent, and dividing that by 365 gives a rental cost of $29.59 a day. Multiply that by the 21 days you're living there, and you get a prorated cost of $621.39.
Step 1: $900 x 12 = $10,800
Step 2: $10,800 / 365 = $29.59
Step 3: $29.59 x 21 = $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.
A few more things to know about prorated rent
Now that you know how to calculate prorated rent, here are a few more facts about prorated rent that you should know.
Prorated rent isn’t required
While it's nice that some landlords prorate rent, it's not a legal requirement. Once you've signed a rental contract, you're responsible for all rental payments until your contract ends, even if you do end up moving in or out mid-month. If you want your rent to be prorated, it's up to you to bring it up with your landlord.
If you move out before the end of the month and your landlord doesn't have someone else moving in immediately, they may choose not to prorate your rent. But if you're ready to move in and aren't able to due to circumstances presented by the landlord, then it's more likely your landlord will prorate rent for the first month as you can't begin living in the rental.
Details should be included in your lease agreement
If you happen to come to an agreement with your landlord on prorated rent, make sure you get it in writing. If it's only a verbal agreement and not written, there may be confusion and disagreement later on between you and your landlord, which can result in rent not being prorated at all.
Get your agreed-upon rent proration in some form of writing. Ideally, it would be included in your rental agreement or a clause will be added afterward. If for some reason you can't get it in your rental contract, get it in another form of writing from your landlord, even if it's an email or text message. That way, you can both easily refer back to it and there's no confusion or tension around the matter.
You can ask your landlord for prorated rent
If you think your rent should be prorated but aren't completely sure, the simple answer is to ask your landlord. The worst that can happen is they don't prorate your rent, and if you do come to an agreement, then you'll save some money.
Understanding prorated rent can benefit you
It’s always good to know the ins and outs of how lease agreements work, especially if you’re entering a lease during the middle of the month. If you know how to calculate prorated rent, it can help you save money or have more flexibility in your budget when finding your next rental home.