Understanding Your Payment Timeline: When Is Rent Due When You First Move In?

When a new tenant signs a lease, landlords collect a series of payments commonly referred to as “first month’s rent.” However, first month’s rent is just one of multiple payments made by a tenant before moving into a rental property. In addition to the first month of rent, renters usually need to pay a security deposit as well. 

Depending on the rental agreement, a tenant may also need to pay prorated rent, last month’s rent, and additional fees. While these payments are often collected at the same time (typically before the tenant moves in), it's important to keep in mind that they're separate payments.

In this article, we’ll discuss everything you need to know about paying first month’s rent, including what payments need to be made before you move in and the difference between each payment. 

Do you pay rent for the first month before you move in?

If you’re wondering: Is rent paid before or after the month? the answer is before. It’s customary for property owners to collect the first month’s rent before a tenant moves in and continue to collect rent on the first of each month.

This helps ensure tenants are not using all of the money they've saved up towards rent to cover other expenses, such as moving costs. It also helps set the tone for the remainder of the tenant’s stay and holds them accountable for paying their rent on time. 

First month’s rent vs. Security deposit

As mentioned above, the first month’s rent is separate from a security deposit. A security deposit is collected in case a tenant causes property damage or fails to pay rent at some point during their tenancy. 

Although a property owner receives the security deposit at the same time as the first month’s rent, they’re not supposed to use their tenant’s security deposit for anything other than property damage or unpaid rent. As a result, a security deposit is categorized as a liability on the property balance sheet and not considered rental income. 

Security deposits are only considered rental income when applied toward rent payments. If all goes according to plan during a tenant’s stay, their security deposit should be returned in full. The maximum security deposit a property owner can collect varies from one state to another; however, security deposit amounts are usually the same or double the amount of monthly rent. 

First month’s rent vs. Prorated rent

Prorated rent is a partial rent payment based on the number of days a tenant lives in the unit before starting their full lease term. While most lease agreements begin on the first of the month, sometimes a tenant needs to move in either before or after the lease start date. To accommodate a tenant’s schedule, property owners often charge prorated rent instead of a full month of rent.

When to prorate rent

Prorating rent makes sense in circumstances where you’ve found a great tenant for your rental property, but for whatever reason, they’re unable to move in on the first day of the month. While it may place a dent in your regular rent collection process, a good tenant is worth the trouble. Charge them a portion of the rent to secure their tenancy, and then charge them rent as usual once they've moved in. 

How to prorate rent

Rental owners can prorate rent for new tenants by dividing monthly rent by the number of days in that month. The formula you can use to prorate rent is:

(Monthly rent/Days in the month) x Number of days tenant will occupy the unit that month

For example, if you charge $1,500 a month for rent, you’d divide $1,500 by 30 to get a daily rate of $50. You would then multiply $50 by the number of days the tenant will be living on your property the month they move in. 

If a tenant is moving in on the 10th, you’d multiply $50 by 20 days, as the tenant would be living on the property for 20 days out of the month, to get a total prorated rent price of $1,000.

Be sure to include how you calculate the prorated rent cost in the lease agreement so that your tenant knows how much they’re being charged. 

First month’s rent vs. Renters' fees

In addition to prorated rent and security deposits, property owners sometimes charge other fees before letting a new tenant move in.

Move-in fees help cover wear-and-tear related repairs, such as patching up holes in the wall, applying a fresh coat of paint, and deep cleaning services. Move-in fees are non-refundable and are usually 20-50% of one month’s rent. For a unit priced at $1,500 a month, move-in fees could be anywhere between $300 and $750.

Pet fees and pet deposits are charged when a tenant wants to bring a pet into their rental unit. A pet fee covers the cost of allowing a pet on the property. Pet fees are non-refundable and range from $50-500 depending on the kind of pet a tenant has.

Pet deposits, on the other hand, serve as a security deposit in case a pet causes damage to the unit. Pet deposits usually cost anywhere from $200-600 and should be returned to the tenant if the pet causes no property damage. 

How much should a rental owner collect before a tenant moves in?

The total amount a tenant needs to pay before moving into a rental property ultimately depends on a property owner’s payment requirements. Based on average costs, a tenant would need to make the following payments before moving into a new rental:

• Prorated rent: $1,000
• First month’s rent: $1,500
• Security deposit: $1,500
• Move-in fees: $300-$750 (20-50% of 1st month's rent)
• Pet fees: $50-$500
• Pet deposit: $200-$600

Taking these numbers into account, a rental owner could collect between $4,550 and $5,850 in total before a tenant moves into their unit. 

Can rental owners require a last month's rent payment up front?

Landlords can, and many do, require last month’s rent before a tenant moves in. Receiving last month’s rent at the beginning of a lease serves as an extra layer of protection for property owners. It tends to be difficult for a rental owner to collect unpaid rent after a tenant has already left the property, so collecting the last month's rent up front makes it less likely for a tenant to owe rent after moving out.

While requiring last month’s rent provides additional protection, rental owners should be mindful of the increased financial burden this places on incoming tenants. Good tenants who are tight on cash may feel like your rental property is unattainable. 

In some states, such as New York, collecting last month’s rent in addition to first month’s rent and a security deposit is illegal, so make sure to check local regulations regarding move-in payments before putting anything in writing. 

Bottom line on pre-move-in rent payments

Before moving into a new rental unit, most tenants will pay the first month’s rent as well as a security deposit. If the tenant is moving in on a day other than the lease start date, they may also need to pay prorated rent. If a tenant is moving in with a pet, the rental owner may require a pet fee, a pet deposit, or both. 

In some cases, landlords collect the last month’s rent before allowing a tenant to move in. However, most landlords only require the first rent payment and a security deposit of an equal amount.

State laws govern exactly what payments landlords can require of tenants and how much these payments can be. Both tenants and property owners should be aware of these regulations before signing a lease or rental agreement to make sure tenant laws are being followed. 

A refresh on your local laws paired with the advice contained in this article will set you down a clear, straightforward path to navigating move-in fees and payments. So, with that being said — good luck on your rental journey!