All Topics / Help Needed! / Am I splitting hairs?

Viewing 6 posts - 1 through 6 (of 6 total)
  • Profile photo of luckyoneluckyone
    Member
    @luckyone
    Join Date: 2003
    Post Count: 148
    October 1, 2004 - 5:39 am

    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?

    Thanks,
    Luckyone

    Profile photo of jeepsterjeepster
    Member
    @jeepster
    Join Date: 2003
    Post Count: 7
    October 1, 2004 - 5:57 am

    Hi Luckyone,

    How do you factor in Leap years? What’s the norm?

    Profile photo of garrytasgarrytas
    Member
    @garrytas
    Join Date: 2004
    Post Count: 36
    October 1, 2004 - 6:04 am

    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.
    Regards
    Garrytas[cigar]

    [email protected] Always have cashflow positive Tasmanian commercial properties
    available

    Profile photo of MonopolyMonopoly
    Member
    @monopoly
    Join Date: 2004
    Post Count: 1,612
    October 1, 2004 - 6:19 am

    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!!!

    Cheers,

    Jo

    Profile photo of luckyoneluckyone
    Member
    @luckyone
    Join Date: 2003
    Post Count: 148
    October 1, 2004 - 6:27 am

    Thanks guys. Wasn’t sure how it worked.

    Thanks,
    Luckyone

    Profile photo of AceyduceyAceyducey
    Participant
    @aceyducey
    Join Date: 2003
    Post Count: 651
    October 17, 2004 - 2:23 pm

    Note that you are charged an extra day’s interest on loans on leap years however :)

    Cheers,

    Aceyducey

    In theory, there is no difference between theory and practice. But, in practice, there is.

    – Jan L.A. van de Snepscheut

Viewing 6 posts - 1 through 6 (of 6 total)

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