Pro-rated rental payment calculation

snap123

Hi, I'm new to this, so please bear with me. I have 2 lodgers moving in on January 3rd and 7th, paying £850 pcm and £950 pcm, respectively. Their monthly rental is due on the 28th of each month. I've tried a few different online calculators, but they all return different results. Could someone please guide me on how to calculate their rent due on 28th Jan? Thank you in advance.

DE_612183

what is the rent period - is it monthly but you expect the payment on the 28th of the month?

easiest way is multiply the rent by 12 then divide by 365 to get a daily date - then work out how many days for 3rd-31st I'd say that was 29 days ( as you count the 3rd and the 31st ).

snap123

Hi, yes the rent period is monthly and payment is due on the 28th of the month. 
Thank you for that. Shouldn't it be 3rd - 28th though as the Jan rent period run until the next cycle?

theartfullodger

Does lodger agreement state rent payable in advance or arrears (different...).

If no lodgers agreement 'umbly suggest get them signed pronto!

snap123

theartfullodger said:

Does lodger agreement state rent payable in advance or arrears (different...).

If no lodgers agreement 'umbly suggest get them signed pronto!

Hi, attached is part of the agreement. 

I'm getting the agreement ready and am trying to work out the 1st month pro-rated rental to be paid with deposit.  

amanda1024

For lodger 1: 29/31 x 850 = 795.16 (where 29 = 31-2)
For lodger 2: 25/31 x 950 = 766.13 (where 25 = 31-6)
Since the rent is pcm rather than per year I think this is the right approach - so you’re charging them for the portion of January that they’re actually there. I don’t think the date of 28th is relevant to the calculation since the agreement says the rent is for the whole month, not just up to the 28th.

theartfullodger

If it's not the normal monthly amount it can't be a standing order can it? 

In your shoes I'd have individual agreements each with move day (3rd, 7th..) as rent payment date.

SO much simpler.  

"KISS", obvs....

snap123

amanda1024 said:

For lodger 1: 29/31 x 850 = 795.16 (where 29 = 31-2)
For lodger 2: 25/31 x 950 = 766.13 (where 25 = 31-6)
Since the rent is pcm rather than per year I think this is the right approach - so you’re charging them for the portion of January that they’re actually there. I don’t think the date of 28th is relevant to the calculation since the agreement says the rent is for the whole month, not just up to the 28th.

This makes sense, thank you. 

snap123

theartfullodger said:

If it's not the normal monthly amount it can't be a standing order can it? 

In your shoes I'd have individual agreements each with move day (3rd, 7th..) as rent payment date.

SO much simpler.  

"KISS", obvs....

Was going to ask them to pay the deposit along with the first month's rent initially, then set up a monthly standing order for future rent payments.  

However, really like your suggestion to simply set the payments dates for 3rd and 7th. Less hassle for sure. Thank you. 

_Penny_Dreadful

I wholeheartedly agree with Arful. If the contract starts 3rd Jan then the rent payment date should be 3rd of each month otherwise not only do you have to faff around with pro-rata rent but also when the licence comes to an end. 

Slinky

theartfullodger said:

If it's not the normal monthly amount it can't be a standing order can it? 

In the good old days of manual paperwork, I used to work somewhere where we would do paperwork for standing orders and would set up a mandate for the customer to sign to send to their bank that would be an initial payment of X followed by monthly payments of Y. Worked absolutely fine.