Announcement

Collapse
No announcement yet.

Pro Rating Lease suggestions

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Pro Rating Lease suggestions

    Looking for suggestions, feedback on front end pro rating of month to month leases. Looking over the options of requiring leases to start on 1st day of month with pro rating of lease if executed during a random day other than the 1st of month or just having lease run from rental agreement date thru paid thru date??

  • #2
    We use the anniversary date and it states right in our Rental Agreement no refunds for unused days but it's becoming a huge problem, Tenants are constantly phoning for refunds and the owner is obliging because he says he doesn't need any negative reviews. I think using the 1st of the month is best as this is when most people move in. The 1st or around the 15th it seems.

    Comment


    • #3
      Thank you for your insight!

      Comment


      • #4
        I have worked properties on both systems. Working on the anniversary date is easier, in my opinion. It spreads the work throughout the month, you don't have all the invoices on 1 day, and all the legal notices on 1 day. There is no prorate confusion. They just pay a full month and the admin fee to move in.
        MamaDuke

        Comment


        • #5
          I run 2 locations.
          1 is anniversary due date.
          The other is the 1st of the month.

          There can be benefits and challenges to whichever one you pick.

          With 1st of the month due date, it is much easier to remember how many days late a tenant may be,
          The one downside is you will only be collecting a partial portion of a full months rent.
          It is easier when it is time to overlock delinquent tenants because they will always be on the same day late.

          With an anniversary due date, your employee's may be having to overlock each and every day.
          That in itself is not a bad thing.
          Also, keep in mind that each and every new tenant will be required to pay for the 1st months rent in full, which is a good thing.

          In my opinion, if you have a smaller property, say under 200 units, you may want to pick anniversary.
          If you have a larger location, 1st of the month may be your best option.

          Either way, they both work!
          Good luck and keep us posted on your final decision!






          Don't put off until tomorrow, what you can do today.

          Comment


          • #6
            Here the rent is due on the 1st. If the tenant rents a unit on the 1st thru the 9th, they pay just the pro rated amount of rent and next rent is due on the 1st of the following month. If they move in on the 10th of the month or after, they pay the pro rated amount for the rest of the month and one more full month and the next rent is due on the 1st of the following month. I explain in detail and it works fine here.
            "Never let the inmates run the asylum!"

            Comment


            • #7
              I feel like for a small site, especially one managed by the owner who runs the storage units as a side job (yes I am talking about myself here) that 1st of the month billing works well. The reasons:
              - Calculating a prorated amount for current partial month is no big deal. I just use a calculator and stick it in a blank on the rental agreement
              - When one of the late tenants calls me I know what there due date is, when late fee will hit, when I will overlock etc, even if I am not at my computer to look it up.
              - I don't do office work daily, more like once a week. So it's nice to just do all the late letters and reminders in batches.

              Reasons to do Anniversary billing instead:
              - Most sites already have a busy time of month due to apartments turning over at the end of the month. Spreading out the billing will help avoid additional traffic increases due to tenants trying to move out before your next rent payment is due.
              - At larger sites with regular manager hours, it can be desirable to spread out the collections and reminder letters rather than have it all at once.
              - Smooths out cash flow

              I think no matter what you do you are going to have problems with tenants asking for refunds. I explain to tenants like this: If you stay at a hotel and leave at 6am, do you get a refund on the unused portion of the $150 stay? No. Our storage facility is similar but in monthly increments. They then must initial on a line that explains that we do not prorate on move out. But then I still get about a quarter of my tenants complaining that they want a refund. The selective memory is irritating.

              And yes I have gotten the bad reviews when I held my ground and it's not worth it.
              Last edited by Steve_hajewski; 19th October 2018, 09:33 AM.

              Comment


              • #8
                I too am an owner operator of a smaller facility. When I purchased this facility the previous owner had the due dates all over the map. I found that system very hard to work with. So I gradually moved all the current tenants to first of the month and made all the new ones first of the
                month. I prorate the first month's rent on new customers that start on any date other than the first. I personally find this system much easier

                Comment


                • #9
                  We have signs and it's in the contract that there is no refund on rent. It's a MONTH to MONTH contract. We use anniversary date too. We also remind people that we need a 10 day notice for move out, it's also in the elevator as a reminder. If they let us know we remove them from autopay and then take a prorated payment if they move out AFTER their due date. If they don't? No refunds of paid rent.
                  I want buns of steel.
                  I also want buns of cinnamon.

                  Newcastle, WA

                  Comment


                  • #10
                    We're on 1st due date, ~400 units.

                    Move in before the 15th, pay the prorated remainder of that month on move in.
                    Move in after the 15th, pay the prorated remainder and the next full month's rent.

                    10 day notice required for move out, so it's easy to tell people to just let me know by the 20th if they're moving out at the end of the month. ALSO, easy to tell potential tenants that I'll have an idea of what units are coming available around the 20th, and if not then, on the 1st (for people that don't give me the notice).

                    Personally, I like all the activity stacked on certain dates of every month. I can plan vacations to be out of the office on days I know there will be little activity, or make arrangements for service providers to fix things on those days when I can be out on the property more.



                    In no way affiliated with Storman software.

                    Comment


                    • #11
                      Are all these options available in site-link?

                      Comment


                      • #12
                        Originally posted by Grizz View Post
                        Are all these options available in site-link?
                        Anniversary due date and 1st due date are indeed options.
                        I want buns of steel.
                        I also want buns of cinnamon.

                        Newcastle, WA

                        Comment

                        Latest Topics

                        Collapse

                        Working...
                        X