# How to calculate prorated rent. 3 popular methods of determining prorated rent.

/# There are 3 common methods of calculating prorated rent:

## 1. Prorate based off of actual number of days in the month

## 2. Prorate based off of assuming a 30 day month (for every month)

## 3. Prorate based off of the actual number of days in the year

**1. Prorate based off of actual number of days in the month**

This is the most common method for residential rentals.

**Step 1** – Determine how many days the tenant will be at the property. Make sure to count the day they move in.

**Example:** Tenant moves in on August 8th. Total days = 24(31 days in August, 7 days they are not there, 31-7=24)

**Step 2** – Calculate the daily rate by dividing the rent by the number of days in the month.

**Example:** Rent is $1200 per month. Month is August (31 days). $1200/31 = $38.7096. . . per day in rent (Don’t round yet.)

**Step 3** – Multiply the number of days by the daily rate to get the prorated rent due.

**Example:** 24 days X $38.7096. . . per day = $929.03 prorated rent for August

### 2. Prorate based off of assuming a 30 day month (for every month)

This method used to be pretty common but has now been mostly replaced by the method #1 above.

**Step 1 **– Determine how many days the tenant will be at the property. Make sure to count the day they move in.

**Example: ** Tenant moves in on August 8th. Total days = 24(31 days in August, 7 days they are not there, 31-7=24)

**Step 2 **– Calculate the daily rate by dividing the rent by 30

**Example: **Rent is $1200 per month. Month is August (31 days). $1200/30 = $40.00 per day in rent

**Step 3** – Multiply the number of days by the daily rate to get the prorated rent due.

**Example:** 24 days X $40.00 per day = $960.00 prorated rent for August

### 3. Prorate based off of actual number of days in the year

This is the most common method to calculate rent during the sale of a rental property (when transferring rent from one owner to another when the closing date of a sale takes place in the middle of the month)

**Step 1 **– Determine how many days the tenant will be at the property. Make sure to count the day they move in. Example: Tenant moves in on August 8th. Total days = 24(31 days in August, 7 days they are not there, 31-7=24)

**Step 2** – Calculate the daily rate by multiplying the monthly rent by 12 (to get annual rent) then dividing by the number of days in the year (typically 365).

**Example:** Rent is $1200 per month. $1200 x 12 = $14,400 per year in rent. $14,400 per year / 365 days in year = $39.45 . . . per day in rent (don’t round yet).

**Step 3 **– Multiply the number of days by the daily rate to get the prorated rent due.

**Example:** 24 days X $39.45. . . per day = $946.85 prorated rent for August

As you can see each method will derive a slightly different rent amount. It is best to stick with one method – which for most residential rentals will be method #1.

There are now some cool online rental calculators you can use to do the math for you. This rental calculator uses method #1 above. There is also neat landlord software like Turbo Tenant to help with the entire rent process.

Which method do you use? Have a question on rent pro-rating? Leave a comment below . . .