According to the latest census, more than half of Los Angeles residents rent their accommodations, creating a high demand for rental units. As a landlord, this means you are likely to come across tenants who are unwilling to wait until the end of the month to occupy your rental property.
Despite the many laws governing landlord-tenant relations in California, landlords have carte blanche when it comes to this aspect. To be fair, it's best to charge these tenants prorated rent, as it will encourage a positive relationship with them in the future.
Read on to discover how property managers calculate rent in these situations.
Why Make a Rent Payment Adjustment?
The most common prorated rent examples involve tenants wanting to occupy your rental unit a few days or weeks before the month's end. While national rental vacancy rates are currently holding steady, it's always in a landlord's best interest to accommodate these tenants by charging prorated rent.
If you own a single rental property it's easy to adjust your rent collection date to coincide with the tenant's occupation date. For instance, if they want to move in on the 20th of the month, you can change your rent due date for every month to the 20th.
This isn't always convenient for landlords who own multiple properties, and it can become stressful. In these cases, it's best to charge prorated rent for the first month and continue collecting rent on the first day of the month after that.
Sometimes, a tenant may request that they vacate your rental unit earlier than the lease expiration date. Landlords are not required to charge them prorated rent for their final few days in these cases.
If they don't pay the full month's rent, you can deduct the difference from their security deposit.
Partial Month Rent Calculations
Computing the cost of a single day's rental is the first step in calculating prorated rent. There are two ways to do this, depending on the type of lease you have in place.
Prorated Rent Calculation for Annual Leases
It's easy to figure out the cost of one day's rent by multiplying the monthly rent by twelve and then dividing the answer by the number of days in the year. To calculate the rent owed by your tenant, you can multiply this daily rate by the number of days they'll occupy the unit in the first month.
Prorated Rent Formula for Month-to-Month Leases
Month-to-month leases are slightly more complicated. Divide the monthly rent by the number of days in the first month to get a daily rate.
If your tenant wishes to vacate the unit early, you can calculate an average daily rate by dividing the total rent paid by the number of days they've already occupied the property.
L.A. Property Managers Help You Figure It All Out
Hiring a full-time property manager is the best way to get the answers to all your property management questions.
Our team of property managers at PMI Los Angeles offers a complete range of services to help you maximize profits and limit vacancies. We pride ourselves on harnessing the latest technologies to ensure you're always up-to-date with your properties' performance.
Explore the ways we can help you thrive as a Los Angeles landlord.
