Calculating Monthly Rental Payments

People are often confused about the calculation of monthly rent payments. The disparity in the length of different months must be taken into account. Remember there are not an equal number of days in every month, not exactly 4 weeks in each month and not precisely 52 weeks in a year.

How does it work?
The weekly rental amount is divided by 7 to determine the daily rental rate, then multiplied by 365 (days per year) to determine the yearly rate and finally divided by 12 to determine the monthly rental amount.

For example, a property is advertised as $650 per week, ($650 divided by 7) is $92.85714 for the daily rate. The yearly rate ($92.85714 x 365 days per year) is then $33,892.8561, and the monthly rate ($33,892.8561 divided by 12) makes the monthly rent $2,824.40
 

If you would like to pay monthly, avoid confusion by establishing how rent is calculated before you sign the tenancy agreement. Ultimately if you need clarification you should arrange an appointment with your agent or Landlord rather than paying a shortfall in order to avoid this reflecting on your rental history. 

 

Mitchell Hockey
Passionate about all things Real Estate, Design and Photography, Mitchell has a strong creative background with a Bachelor of Design in Visual Communication (Hons) from the University of Technology, Sydney.

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