Tips on how to Prorate Rent The Correct Way!

During the middle of the month was when I first found one of the first tenants.

This arrangement made me happy. Occupancy is better than vacancy anyway, even if it starts on an unusual day. When I first met the new tenant it was already three weeks deep into the calendar month. It was already around the 20th and I never expected any occupancy during that time of the month. The new tenant would move-in on the first of the following month if I could fill the spot, I assumed.

I found an even better arrangement, luckily. I was thrilled when I found a tenant who was willing to move in right away. ( I checked his references and work history to be sure that he was a qualified tenant — that should go without saying.)

I said yes when he asked if I’d prorate the rent for that first month. A security deposit was paid plus approximately one-and-a-half weeks’ rent (we calculated the daily rate). I handed him the keys, and we continued with our lives, happily ever after.

The end.

Or Is It?

In hindsight, I may have gotten lucky. In my experience, I happened to have a reliable tenant who paid a full month’s rent on the first of the following month. He was tidy, reserved and always paid on-time on his entire tenancy that’s why when he moved out of state I was sad to lose such a quality renter.

But what if I hadn’t been so lucky? What if I had allowed someone to move-in and establish tenancy … at the cost of roughly a single weeks’ rent?

What if he hadn’t paid the following months’ rent?

Looking back on that situation, I think I should have prorated the rent differently.

Here’s What I Did:

Month 1: Collect prorated rent (plus deposit)

Month 2 – 12: Collect full rent


Here’s What I Should Have Done Instead:

Month 1: Ask for a full months’ rent at move-in (plus deposit)

Month 2: Allow tenant to pay prorated rent for this month

Month 3 – 12: Collect full rent as normal


Why? What Would Be The Advantage To Setting Up (And Trying To Explain) This Complicated System?

Simply put: the more you collect upfront, the better. If the tenant decided to skip out on paying rent, and I had to let them move out, I’d at least have a full months’ rent in hand.

You might think that I’m being paranoid or excessive, and I can see two valid reasons that would support your thought. First, at the first few months many problem tenants will show good behavior. They begin to slip after that. So there’s a good chance that the scenario I’m describing is a low-likelihood situation. Second, if someone lives in your dwelling for less than 30 days, then depending on the laws in your place, you might have an easier time evicting that person.

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Nick Walton
JP & Associates Realtors
[email protected]