BestNeighborhoods.org says the average monthly rent in Atlanta, GA, is around $1,438. While higher than the U.S. average of $1,233, it tends to be lower than in cities close to ATL.
Atlanta's affordable rent makes it a prime spot for renters and landlords. Tenants often flock to places with reasonable rents, so owning rental property in ATL indicates a high potential for stable rental income.
As a new Atlanta landlord, one of the tricks of the trade you must learn is how expert property managers calculate prorated rent.
In this guide, our team at PMI Atlanta West will share the steps for prorated rent methods Atlanta landlords should follow, so please read on.
Establish a Reasonable Monthly Rent
One of the most crucial property lease management tips is determining a fair rental rate; if you charge too low, you won't make any profits, and if you charge too high, you may struggle to find tenants.
According to Smart Asset, the 1% guideline is a typical starting point for determining rent charges. It suggests charging a monthly rental fee equivalent to 1% of the property's value. So, if your property is worth $250,000, you could rent it out for $2,500 a month.
The above is just a general guideline, as you must also analyze rental pricing factors like:
- Your property's location
- Demand for the type of property you own
- Your property's condition and amenities
Either way, you must determine a specific amount, which you will use as the basis of your Atlanta, GA, rent calculation for prorated charges.
Determine the Applicable Month's Number of Days
The specific month and its number of days determine the amount of prorated rent to collect. Use this list for easy reference:
- January = 31 days
- February = 28 (29 during a leap year)
- March = 30
- April = 31
- May = 30
- June = 31
- July = 30
- August = 31
- September = 30
- October = 31
- November = 30
- December = 31
Figure Out the Daily Rent
Divide the monthly rent by the applicable month's total number of days.
Say your monthly rent is $2,500, and you're calculating for May, which has 31 days. In this case, the formula would be: $2,500 / 31 = $80.645 (rounded off to $80.65)
Factor in the Number of Days of Occupancy
Next, establish how many days the tenant will occupy your rental in May. For instance, if their lease agreement starts on May 16, their May occupancy will be 16 days.
Calculate the Prorated Rent
Now that you have all the variables, the next step is to multiply the tenant's number of days of occupancy by the daily rent. In the above scenario, the computation will look like this: 16 days X $80.65 = $1,290.40. So, you must only charge your tenant $1,290.40 for their 16-day April tenancy.
Calculating Rent for Property Managers Made Easy
As you learned in this guide, calculating prorated rent in Atlanta, GA, is easy as long as you have all the variables. However, it can still be time-consuming, especially if you haven't mastered the ropes yet or have multiple properties to account for.
Fortunately, PMI Atlanta West's expert property managers are here to help. We provide full-service professional property management solutions, including accounting and rent collection. Our owner and CEO, Mel Whatley, brings 15 years of real estate expertise to the company, while our CPA, Mateja Whatley, has 14+ years of accounting background.
Speak with us today for a complimentary consultation!
