Property Management Brainstorm
Five Minute Friday #9 - What is 2nd Month Proration?
Dec 20, 2019 · 5 min
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When a new tenant moves in on the 15th of the month, it is only fair to prorate the rent—charging them only for the number days they occupy the unit. But there is a downside to charging a partial month’s rent at move-in. So, what’s the best approach to proration? How can we be fair to our tenants and meet our own financial obligations? 

On this episode of Five Minute Friday, Bob explains the standard practice of prorating the rent when a tenant moves in mid-month and shares an example of how prorated rent is calculated. He discusses how the first month proration system works and why it may leave you short as a landlord.

Bob goes on to introduce us to second month proration, explaining what tenants pay in the first, second and subsequent months under this policy and how it provides assurance that the tenant can afford a full month rent payment. Listen in to understand when a landlord might require both first and last month’s rent at move-in and learn which system we use here at North County Property Group!

Topics Covered

[0:39] The standard practice of prorating the rent rate for partial months

[1:09] How prorated rent is calculated

[1:34] How the 1st month proration system works

[1:46] Why the 1st month proration system may NOT be a good idea

[2:21] The 2nd month proration method

[2:29] What the tenant pays at move-in under the 2nd month proration system

[2:48] What the tenant pays in the 2nd month under the 2nd month proration system

[3:11] The special situations when a landlord might require both 1st and last month’s rent as well as a security deposit

[4:03] The benefit of using a 2nd month proration system

[4:37] Why North County Property Group prefers the 2nd month proration system

Connect with Bob 

North County Property Group

This episode is always available for listening, sharing, or download at Property Management Brainstorm. Subscribe to Property Management Brainstorm on Apple Podcasts, Google Play Podcasts, Stitcher, Spotify, and YouTube.

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