Real Estate and Lease-Related Calculations
Prorating rent
Use the actual number of days in the month for rental proration: prorated rent = monthly rent × days occupied ÷ days in the month. Count the days occupied inclusively, from move-in day through the end of the month. Because February, April, and months with 31 days produce different answers, distractor options usually reflect a 30-day assumption.
Commissions and lease value
Lease commission = total lease value × commission rate, where total lease value = monthly rent × number of months. A 12-month lease at $1,800 per month is $21,600 in value; a 5% commission is $1,080. Then apply the brokerage split - a 60/40 split on $1,080 gives $648 to the agent. Renewal commissions depend on the representation agreement, so read the agreement before assuming.
Affordability and unit economics
Most landlords require gross monthly income of about three times the rent (equivalently, rent at or under one-third of gross income). Per-square-foot rent = monthly rent ÷ square feet. Occupancy rate = occupied units ÷ total units; a 40-unit building with 36 leased units runs 90% occupancy.
Worked example
Move-in October 15 at $1,500 per month. October has 31 days; October 15 through 31 is 17 days. Prorated rent = $1,500 × 17 ÷ 31 = $822.58. Add the security deposit (say $1,500) and the first month's rent collected at signing to compute total funds due, and route it all to the sponsoring broker.
Traps
Defaulting to 30-day months, forgetting to add the deposit to the move-in total, and applying the commission rate to monthly rent instead of total lease value.