How Do You Calculate Prorated Rent? Top Tips for Houston, TX, Property Managers

How Do You Calculate Prorated Rent? Top Tips for Houston, TX, Property Managers

More than a third of Americans rent their homes rather than owning them. Many of them move in at times that don't line up with the beginning and end of the month. As a result, property managers often have to prorate rent.

What circumstances cause rent proration? If you have a renter move in during the middle of the month, how much less do they pay? With rental prices in Houston dropping, knowing how specific rent issues work can help a new landlord.

Look no further for property management tips. Read on for the basics of rent proration in Texas.

Why Property Managers Prorate

Prorated rent calculation occurs when someone stays less than a full month in a dwelling. Most renters encounter prorated rent when they move in after the beginning of the month. Other circumstances can also lead to a short-term stay.

Legal Breaking of Lease

In some cases, a renter has the right to break a lease. Under Texas rental law, some of the most common reasons to do so include family violence, military service, stalking, and a landlord's failure to repair the unit.

A tenant who dies also has the right to have a lease terminated by the estate. This death exemption only applies if the decedent did not share the dwelling with anyone else.

Unforeseen Moving Difficulties

Sometimes, residents become ill or injured during the moving period. Tenants may also find a new job while moving out and need extra time to sort out the situation.

If you have great tenants, you might extend them a grace period in times like these. Such a period will give them a few days to straighten things out without the pressure of a move.

How to Calculate Prorated Rent

Calculate monthly rent for the tenant, including any services that come with the residence. Add up the number of days within the month the tenant will stay and divide it by the length of the month. Multiply those two numbers to get the prorated rent.

For instance, a tenant who moves out after the first week of July pays about 22.6% of the rent for that month, dividing seven by 31. If that tenant had a $2,000 rent payment per month, the prorated rent would cost $451.61.

Houston property managers must use the length of the specific month for rent adjustment methods. Other states allow a generic 30-day month, but not Texas.

Alternatives to Prorated Rent

Some landlords start counting months from the move-in date instead of the first day of the month. Many renters find this easier to wrap their heads around.

It does make more accounting work for you, though. If you find dealing with security deposits, pet fees, and other charges stressful enough, prorated rent can keep the number of days per month you spend on accounting down.

Rent, Day by Day

Many property managers and landlords deal with prorated rent. Both tenants and landlords benefit from clear terms about what to do when life doesn't play by the calendar's rules.

If you find dealing with the fine details of rent challenging, ask for our help. At PMI Bear Creek, we offer assistance with tenant screening, rent collection, eviction, and other property tasks. Reach out for a free rental analysis today.

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