To Prorate or Not to Prorate Rent?
A scenario may arise where a tenant may request to pay only a portion of the rent, also known as prorated rent. Prorated rent may be set for when a tenant is only in the property for partial time, such as moving in late or choosing to move out earlier. If they only occupy the unit half the time, paying the entire month’s rent may not be considered just. Tenants may apply for prorated rent but in the end it’s up to the landlord to make a final decision, which should be done in writing. It can also help a tenant get through a tough financial time. For example, due to the pandemic many landlords have agreed to prorated rent to support tenants facing difficulties. Instead of having no rent coming in, the owners are negotiating with tenants to create mutually beneficial financial arrangements. It is normal for tenants who move in to apply for prorated rent within the first month. It is up to you to decide how much they qualify to pay a prorated portion for. Perhaps you do not charge a prorated rate if they come in on the second. However, if they are moved in on the 15th, and live just half a month in the property, it would be fair to prorate to make sure your tenant is happy. Prorating rent for the right conditions will help the relationship between your landlord and tenant, producing long-term tenants that are willing to refer others. This will help you retain a tenant by demonstrating that you are receptive to their needs. If you have had a unit difficult to fill, prorating will also help you secure a tenant. By demonstrating you have their best interests in mind, and not your gains, you can prosper with full units and attractive tenants in the long term.
This update is by Livo, a rental optimization platform aimed at providing you with a robust revenue enhancement tool. With Livo, you can maximize rental yields, accept and manage multiple offers and offers, and enjoy better retention. Livo targets rentals with the greatest odds of receiving a multitude of offers, and those with the best locations, features, configurations and more. Please call 833.333.5486 today to learn more.