Weekly rent to monthly
As GeeDee works on a Calendar Month it is recommended that Monthly tenant's be setup so that their rent falls due on the 1st of each month rather than crossing over into different months. The tenant may need to make an adjusted payment when they move in, so this can be achieved.
The Tenant receipt program calculates the paid to date to the nearest day for any odd rent amount (not a whole period) which has been entered.
When it is a weekly or fortnightly rental period, then there is no difficulty as the conversion from weekly to daily is simple. When it is a monthly rent, then the calculation is contentious. The program uses the number of days in the current month to calculate a daily rental figure.
Eg. Months are between 28 and 31 days long.
It may seem simpler to use the average days in a month, but this can produce the following anomaly.
Eg: Rental amount = $ 1000 p.m.
Using an average of 30.5 days per month
1000/30.5 = $32.79 per day x 14 = $ 459.08 per fortnight.
If the tenant then pays:
1st February to 14th February = $ 459.08
14th February to 28th February = $ 459.08
Total monthly payment = $ 918.16
1st March to 14th March = $ 459.08
15th March to 31st March = $ 557.38 (for 17 days)
Total monthly payment = $ 1016.46
This is why the program uses the number of days in the month and not the average number of days in a month. This is so that if a portion of a monthly rent amount is paid at any stage, then the remaining portion will make up a whole month.
After the user has entered the rent amount, and the program calculates the paid to date, the user may still adjust this date without the program recalculating the rent amount.
Due to the contentious nature of the conversion between monthly and daily rents, it is better to avoid the conversion when possible. Unfortunately, the stipulations of the Residential Tenancies Act force this conversion to be made when a tenant takes up a lease.
If a tenant has a lease agreement that states weekly rent however you wish to set up monthly rent, this needs to be agreed by both parties. The Tenant and Landlord have agreed to a monthly figure. It is always best to start the monthly cycle on the 1st day of the month. If the tenant starts their lease mid month do a pro rata receipt to take them until the end of that month and then start monthly from the 1st day of the following month.
One way to calculate a monthly figure would be the following.
e.g. Weekly rent is $675 per week divided by 7 (days) multiplied by 365 days per year divided by 12 months equals $2933.03 per month.
Note: If you calculate the following way $675 per week multiplied by 52 weeks then divided by 12 months the figure equals $2925 per month however it is only for 364 days in total which is incorrect.
Disclaimer: The monthly figure must be agreed upon by the Landlord and Tenant and the above calculations are a guide only and GeeDee cannot be held responsible for agreed monthly figure.
© GeeDee for Windows Pty Ltd 1984 - 2018 All rights reserved. Real Estate Software by Real Estate Professionals.
Trust Accounting & Property Management Software with Enterprise Electronic Document Management.