Imagine this.
Your internet service in North Atlanta, GA, gets cut off for some reason that's out of your control and was your provider's fault. Unfortunately, the problem went on for three weeks. Even worse, when your monthly statement arrived, you discovered that your ISP still charged you an entire month despite your internet working for only a week.
Why would you pay for one whole month for just a week of service?
The same applies to rental agreements and leasing in North Atlanta. In such instances, landlords and property managers should apply prorated rent.
Read on, as our team at PMI North Atlanta will share must-know information and property management tips in this prorated rent calculation guide.
Are Landlords and Property Managers Required to Prorate Rent?
In some instances, they should, such as if tenants must terminate their lease agreement due to civil matters and legal orders, as outlined in Georgia Code § 44-7-23. In these cases, tenants will only be liable to pay prorated rent until the lease termination's effective date.
However, in most other situations, it isn't a legal requirement. But it's still a common practice, especially among smart and savvy landlords and professional property managers.
Prorating rent is a sign of goodwill, particularly for new tenants. It shows that landlords and property managers have fair policies, which can help enhance tenant satisfaction and happiness. Happy tenants are more likely to stay longer and renew their lease.
Rent proration usually applies at the beginning and end of a tenancy when tenants won't occupy the rental for an entire month.
How Do You Calculate Prorated Rent, Then?
There are several ways, but the most common and easiest prorated rent formula when collecting rent in proportion is to base it on the number of days the tenant will stay (or have stayed). Here's how the calculation goes:
- Determine the daily rent by dividing the rental amount by the number of days within the given month
- Multiply the daily rent by the number of days the tenant has or will occupy the property
Let's say you're a landlord-property manager who charges the average rent in North Atlanta, which, as BestNeighborhood.org notes, is around $1,650 monthly. Your new tenant will move in on November 16th, so they'll only occupy the property for 15 days this month.
To determine your tenant's November payment, divide $1,650 by 30 (number of days in November), which gives you a daily rate of $55. Then, multiply this by 15 days. So, for November, you should only charge your new tenant $825.
Need More Expert Guidance on Rent Fees and Rental Management?
North Atlanta landlords acting as property managers should always consider charging prorated rent whenever tenants won't occupy a rental for an entire month. It's only fair to do so, plus it can help minimize legal tenant vs. landlord disputes.
If you need professional assistance managing your rental in North Atlanta, GA, look no further than PMI North Atlanta. As your professional property manager, we'll handle all your property management duties, from rental evaluation and pricing to rent collection, accounting, lease enforcement, and property maintenance. Our owner, David Kane, has over 25 years of accounting experience and over a decade of operations and property management expertise.
Connect with us today to request your free rental analysis!
