In Milwaukee, WI, there are numerous clear-cut laws and regulations regarding landlord-tenant relations. These serve as an invaluable guide when navigating the intricacies of owning investment properties.
Yet, there are times when you'll need to use your judgment in certain matters. One of these is when a tenant wants to occupy or vacate your rental property in the middle of the month.
In these cases, you must know how to calculate the prorated rent for the extra days. Read our Milwaukee rent guide to discover how property managers deal with these unusual situations.
Why Would You Calculate Prorated Rent?
As residential rental vacancy rates start to climb, landlords can't afford to turn away prospective renters. So, it's always best to accommodate those who want to occupy your unit early.
If you own a single rental unit, you can avoid a prorated rent calculation by changing the rent due date to coincide with the occupation date. For instance, if the tenant wants to move into your unit on the 10th of the month, you could make the rent due on the 10th of every month afterward.
For those who own multiple rental properties, this can become confusing and cumbersome. In these cases, it's worth calculating prorated rent for the first month of occupation.
The landlord is not obligated to prorate rent when a tenant decides to leave the rental unit before their lease expires. You might decide to do this as a thank-you to good tenants or if you have a new tenant willing to occupy the unit right away.
If a tenant leaves a rental unit early without paying their rent in full, the landlord may deduct the outstanding amount from their security deposit.
Prorated Rent Calculations
All prorated rent calculations start with determining the cost of renting one day in your investment property. This depends on the type of lease you have in place.
Prorated Rent Calculation for Annual Leases
Calculating the value of one day in an annual lease is easy. Simply multiply the tenants' monthly rent amount by 12 and then divide the answer by the number of days in the year.
Remember that you should divide by 366 for a leap year and not 365. When you have a daily value, multiply this by the number of days the tenant will occupy the unit.
Prorated Rent Calculation for Month-to-Month Leases
Calculating a daily value for month-to-month leases involves one extra step. Start by counting the number of days in each month of the lease.
Then divide this number by the months of occupation, and divide the monthly rent by this number. The answer equals the daily rate for your rental unit.
Property Managers Help You Figure It All Out
Calculating prorated rent isn't difficult once you've mastered the basics, but it can make all the difference in tenant satisfaction. Hiring an accomplished property manager helps you enjoy more property management tips for harmonious tenant relationships.
PMI Property Pros offers a full range of commercial and residential Milwaukee property management services, as well as brokerage services. As Milwaukee's leading property managers, we pride ourselves on delivering outstanding customer service while maximizing landlord profits.
Our state-of-the-art technology and high attention to detail ensure satisfaction for landlords and tenants who work with us. Find out more about our growing company and how we can help you maximize your Milwaukee rental business.
