With thousands of people moving in and out of Kansas City all the time, you need to be ready if your tenants do the same. You must prepare to ask for, or refund, prorated rent based on when people move in or out. Though, what is the meaning of "prorated rent" and how do you calculate it?
Below, we will explain why you need to know about this important rental term and how to determine its price. By the end, you should understand how to use it moving forward.
The Meaning of "Prorated Rent"
When you have someone in your property for a full month, you can expect to get the full cost of monthly rent from the tenant. In some cases, though, they will not be on the property the whole time. This may be if they move in or out partway through a month, for example.
Your rental agreement should inform them of where a month's rent starts and ends. This will usually, though not always, be from the first of one month to the first of the next. Prorated rent is instead when you only charge the individual for a portion of the month.
Calculating Prorated Rent
You must first work out the daily rental rate by dividing the tenant's monthly rate by the number of days in that single month. After that, you add up the days they will be staying on the property during that period.
Multiply the above daily rental rate by the number of days the tenant will be on the property and you will find the prorated rent.
If this is too difficult, then use a prorated rent calculator, many of which you can find online.
Communicated Prorated Rent to Tenants
You will likely need to inform tenants of prorated rent terms long before you apply it. Ensure they understand each lease term in their contract, including these, to avoid any surprises for them.
As soon as you know you will need to charge a tenant a partial rent payment, contact them. Inform them of how you worked out the charge, and what they need to pay. You should also inform them of any time period they need to pay this in to ensure you get the money you deserve.
If you need to refund the tenant due to them paying more than the prorated rent, contact them. It is important to enact their preferred method of paying this back as soon as you learn about it.
Handle Rent Easier
Now you understand the meaning of prorated rent and how it affects you, you can start to apply it. Still, if this is too much effort we do not blame you. Sometimes the ins and outs of property management in Kansas City, Missouri, can become overwhelming.
We can help you out by handling as much of your property as you want to take off your hands. This way, you can either work on a much larger portfolio or take time to focus on other projects.
So, get in contact and find out what we can do for you today.
