Property management & leasing
Prorated Rent: Definition & Example
What Is Prorated Rent?
Prorated rent is a partial rent payment charged for only the days a tenant occupies a unit in a given month, usually when a lease starts or ends mid-month.
What does prorated rent mean?
If a tenant moves in on the 15th, charging a full month would mean paying for days they could not use the unit. Instead, the landlord calculates a daily rate and charges only for the occupied days.
There are three common ways to calculate the daily rate: monthly rent divided by the actual days in that month, monthly rent times 12 divided by 365, or monthly rent divided by a standard 30 days. The lease should say which method applies.
Proration is usually required only when the lease or local law calls for it. Some landlords avoid it by starting every lease on the first of the month.
Prorated rent example
Rent is $1,500 per month and the tenant moves in on September 20. September has 30 days, so the daily rate is $1,500 ÷ 30 = $50. The tenant occupies 11 days (September 20 through 30) and pays $550 in prorated rent, then pays full rent starting October 1.
Related terms
- Lease AgreementA lease agreement is a contract between a landlord and tenant that sets the rent, the term, and the rules each side must follow while the tenant occupies the property.
- Rental LedgerA rental ledger is a running record of every charge and payment on a tenant’s account, including rent, fees, credits, and the resulting balance.
- Late FeeA late fee is a charge added when rent or another payment is not received by the due date or the end of any grace period stated in the lease.
- Security DepositA security deposit is money a tenant pays a landlord at the start of a lease, held to cover unpaid rent or damage beyond normal wear and tear when the tenant moves out.
Prorated rent FAQ
- How do you calculate prorated rent?
- Find the daily rate (usually monthly rent divided by the days in that month), then multiply by the number of days the tenant occupies the unit.
- Is prorated rent required by law?
- Not everywhere. It is often a lease term or a common courtesy, though some jurisdictions address proration at move-out or when a lease ends early.
