Do you have any renters in Des Moines who aren't staying in your property for the full month?
If this is the case, then you need to start working on prorated rent for them. If you're not used to working with lots of numbers, then this task can seem a bit confusing.
What should Des Moines property managers know about prorated rent? Read on for some simple formulas and tips to keep your renters happy.
Des Moines Rent Calculation Methods
There are different prorated rent methods, and it's crucial to use the correct one for your property in Des Moines. Each method provides a slightly different result, but all are accurate as long as you apply them consistently.
Daily Rate Method (30-Day Month)
The first method divides the monthly rent by 30 days, regardless of how many days are in the month. This is the most common way to calculate prorated rent in Iowa. Here's how to do it:
- Find the monthly rent amount
- Divide the rent by 30 to find the daily rate
- Multiply the daily rate by the number of days the tenant will stay in the property that month
Exact Days in the Month Method
In this method, you divide the rent by the actual number of days in the month. For example, if the month has 31 days, you divide the rent by 31. If the month has 28 days (February), you divide by 28.
This method is more precise but may require extra effort for months with varying days.
365-Day Method
Another way to calculate prorated rent is by using the 365-day method. This method is useful for long-term leases. You divide the yearly rent by 365 days to get the daily rate and then multiply it by the number of days the tenant will stay.
- Find the yearly rent (monthly rent × 12)
- Divide the yearly rent by 365 to find the daily rate
- Multiply the daily rate by the number of days the tenant will occupy the property
Prorated Rent and Iowa Rental Guidelines
As a Des Moines property manager, it's essential to follow Iowa rental guidelines when calculating rent. There's no specific Iowa law requiring prorated rent, but it's considered fair and standard practice.
Including a prorated rent clause in your lease agreements can help prevent disputes with tenants. It clearly outlines the method you will use to calculate prorated rent, ensuring transparency.
Property Management Tips for Calculations
Stick to one method for all your properties. Consistency makes it easier for both you and your tenants to understand the calculation.
Make sure your lease agreement includes details about prorated rent to avoid confusing renters.
Keep tenants informed about how prorated rent is calculated because transparency is the foundation for nice relationships. Your renters need to trust that you can always do accurate rent calculations.
Property Managers Need to Know About Prorated Rent
Prorated rent calculations are essential for property managers in Des Moines who are fair and efficient. By choosing a consistent method and following Iowa rental guidelines, you can ensure smooth and correct rent calculations.
Do you ever feel like running your Des Moines rental property business is too strenuous? Contact PMI Central Iowa to learn how we can help. Our property management franchise has been providing stellar services for over two decades.
