- luckyoneMember@luckyoneJoin Date: 2003Post Count: 148
I have just got a new property manager and am not sure whether I am been too picky here. It is with the way the rent has been calculated for the new tenant who is moving in. They want to pay monthly. The new property manager has calculated as follows:-
Weekly Rent*52/12 = monthly rent
My way of thinking it should really be:-
Weekly Rent/7*365/12 = monthly rent
This ends up that we are getting about $4 less per month her way than mine.
Am I just splitting hairs?
LuckyonejeepsterMember@jeepsterJoin Date: 2003Post Count: 7
How do you factor in Leap years? What’s the norm?garrytasMember@garrytasJoin Date: 2004Post Count: 36
Yes I think you are!
Unless you are charging an annual rent.
Normally residential rent is based on a weekly figure of which there are 52 weeks in a year,
Therefore weekly rent*52/12 would be correct
If you were for example charging say a rent of say
$25000 per year then the second method would be correct, more usual in commercial situations.
[email protected] Always have cashflow positive Tasmanian commercial properties
availableMonopolyMember@monopolyJoin Date: 2004Post Count: 1,612
Yes Luckyone, you are definitely splitting hairs!!
The rent is normally calculated monthly using the first formula you provided to work out “calendar month” payments. And although, technically as per your daily calculations, you are indeed losing approx $4 per month (which is hardly a huge loss), the first calculation assumes that EVERY year is the same, including leap years!!!
JoluckyoneMember@luckyoneJoin Date: 2003Post Count: 148
Thanks guys. Wasn’t sure how it worked.
LuckyoneAceyduceyParticipant@aceyduceyJoin Date: 2003Post Count: 651
Note that you are charged an extra day’s interest on loans on leap years however
In theory, there is no difference between theory and practice. But, in practice, there is.
– Jan L.A. van de Snepscheut