Rental property owners have several goals, but they all lead to the same desired result: to make more money.
Making more money requires work and strategy, and you can hire property managers for help. A property manager may suggest multiple methods, one of which is to minimize your vacancy rate.
Reducing your vacancy rate increases your revenue, but it may require learning how to calculate prorated rent. Prorated rent is beneficial for landlords in several ways.
Continue reading to learn its benefits and how to calculate it in Jacksonville, FL.
What Is Prorated Rent?
Rental revenue is the money you collect from your tenants for rental payments. Rental revenue doesn't include money you receive from a tenant paying their security deposit or other deposits. It's only from rent.
One of the top property management best practices is to increase the rental revenue by prorating rent. Prorated rent is simple to understand. It means a tenant pays a partial month's rent to move in before the first of the month.
The goal is to maximize a property's returns. If someone moves in a week early, you collect an extra week of rent.
How Do Property Managers Calculate It?
While there are several ways to calculate prorated rent, the easiest method is to use a 30-day month calculation. First, find out how much the unit's daily rent is by dividing the monthly rent by 30 days.
Next, determine how many days the tenant will live in the unit for the first month, which is a partial month. Finally, multiply the number of days they'll occupy the unit by the daily rate.
For example, you would charge a tenant $450 if they move into an apartment with $900 rent on the 15th of the month. The daily rate is $30, and they'll live there for 15 days.
What Are the Benefits?
Prorating rent offers several benefits, including a decrease in the vacancy rate. Decreasing the vacancy rate results in increasing the occupancy rate, which naturally leads to collecting more revenue.
Secondly, prorating keeps all the rent due on the first. If you allow a move-in schedule on a date other than the first, the tenant might want to pay on that date every month. Unfortunately, this complicates your property accounting.
Prorating keeps the schedule the same for every tenant. Therefore, it doesn't create complicated rent collections. Instead, it increases your rental revenue.
You can prorate rent whenever necessary or hire a property manager to handle it for you.
Consult a Property Manager to Boost Your Revenue
Property managers use prorated rent as a strategy for increasing rental revenue. When combined with other strategies, you could see a significant increase in your company's income.
Hiring a property manager can help you achieve these goals, but you'll need to find the best company in Jacksonville, FL.
Northeast Florida Reality, Inc. has served this community since 2003 with a "hands-on" approach. We are real estate experts and can help you increase your rental revenues through prorated rent and other strategies.
Reach out today to learn more about our services.
