What does it mean to Prorate rent?
When a tenant moves into a property in the middle of a month, they sometimes don’t understand that they don’t have to pay the whole month’s rent before moving in. Why? Because they only occupy the property for a portion of the month. What happens? We prorate the rent.
This means that we divide the rent by 30 days to give us the daily rental amount. We then multiply that daily rental amount by the number of days the tenant will be in the home. For instance, a tenant moves into a property on the 15th of the month. The monthly rent is $1000. $1000 divided by 30 days = $34 a day. The tenant will be in the property for 15 days of the month. 15X$34=$510. The tenant then pays $510 for the first month’s rent.
In any case, if you hear a term like prorate that you don’t understand, ask to have it explained to you to avoid any potential surprises.
This blog post was provided by our St. George Property Management partners at Utah 1st Property Management. If you have a St. George rental property that needs management, or you are looking for a home to rent, get in touch with Utah 1st.