Despite the many regulations governing landlord-tenant relations in Arizona, unexpected situations are part and parcel of property management in Phoenix. In an ideal world, every tenant would occupy your rental unit from the first day of the month and depart on the last day of their lease, paying their rent accordingly along the way.
When prospective or existing tenants want to deviate from this norm, it's usually in your best interest to calculate prorated rent for their stay.
Read on to explore top rent calculation tips from experienced Phoenix property managers.
Why Charge Prorated Rent?
As Arizona rental vacancy rates continue on an upward trajectory, turning away prospective tenants isn't a profitable decision for any landlord. So, when a tenant wants to occupy a unit on any day other than the first of the month, it's best to accommodate them by charging prorated rent.
This can help you rent the property faster and avoid costly vacancies.
Prorated Rent Calculation Techniques
If your landlord owns only a few rental units, it's easy enough to adjust the rent due date to correspond with their occupation date, i.e., the 10th of the month instead of the 1st of the month.
In cases where landlords own multiple properties, this can get confusing, so it's best to do a few sums to ensure consistency when collecting rent. In these instances, you'll need to charge the tenant prorated rent to bring them in line with the other tenants.
Landlords are not obligated to prorate rent for tenants who vacate a rental unit before their lease expires, but they may want to do this as a reward to good tenants.
Other times, the landlord may agree to allow the tenant to stay for a few days after their annual lease expires. This would necessitate a prorated rent calculation, too.
All prorated rent calculations depend on discovering the value of one day's rent for the accommodation. This depends on the type of lease agreement that's in place.
Annual Lease Prorated Rent Calculations
Calculating a daily rate for an annual lease is the easiest calculation of the two. Simply multiply the monthly rental by 12 and then divide it by the number of days in the current year.
To arrive at the rent-due amount, multiply the daily rate by the number of days the tenant wishes to occupy the unit.
Prorated Rent for Month-to-Month Leases
Things can get a little more complicated when calculating a daily charge on a month-to-month lease. In these cases, you should count the number of days in each month that the tenant occupied the unit. Then divide this amount by the number of months they were in occupation.
This gives you the average number of days per month of occupation. Divide the monthly rental by this total to get the daily rate for the rental unit.
Property Managers Offer Simple Solutions
Owning a rental unit can be fraught with unusual and sometimes complicated situations. A team of property managers can help you navigate them all legally and profitably.
PMI Phoenix Metro is a leading property management company backed by a nationally acclaimed franchise. We use the latest technology combined with extensive local knowledge and outstanding customer service to help all our landlords reduce stress while ensuring profits.
Explore effective property management solutions for your Phoenix investment home today.
