Wood Property
How to adjust rent payments?

How to adjust rent payments?

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Paying rent each month is straight forward. However, when it needs to be adjusted for different pay dates or part payments, it can get confusing.

Hopefully this answers all your questions and helps you understand how it works.

Rent payment fast facts.

  • Rent is paid monthly in advance.
  • Rent is paid from the same pay date each month, up to the previous day of the following month.
  • Rent should be transferred 3 days prior to the due date so it arrives and clears into the agents trust account on time.
  • Rent is agreed as $ per week but paid as $ per month

How to convert rent per week to rent per month.

  • Start with the rent per week – eg $420 per week
  • Divide the rent per week to get a rent per day – $420 ÷ 7 = $60 per day
  • Multiply the rent per day by 365 days of the year – $60 x 365 = $21,900 per year
  • Divide the rent per year by 12 months – $21,900 ÷ 12 = $1,825

Adjusting the rent pay date

After your first month’s rent, Wood Property may ask the renter to adjust the renter’s pay date to the 20th of the month which is our common payment date. Therefore, the second rent payment is an adjustment payment for part of a month to move the payment date to the 20th of each month.

As an example if the lease commences on the 9th of May, the first month’s rent is paid from the 9th May to the 8th June. The second and adjustment rent is from the 9th June to the 19th June. The adjustment rent is therefore for 11 days rent.

From then on, the rent is payable from the 20th of each month to the 19th of the following month.

Here is an example using the above rent as an example ($420/week – $60/day – $1,825/month.

  • First month’s rent paid on 9th May to 8th June – $1,825
  • Adjustment rent from 9th June to 19th June – 11 days x $60/day = $660
  • Ongoing monthly rent payable on the 20th of each month – $1,825/month

This same adjustment calculation can take place at the end of the lease if the vacate date is different to the date the rent is normally paid up to.

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