Why is Rent Due on the First of the Month?

General Landlording & Rental Properties
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Why is Rent Due on the First of the Month?

Julie MarquezPro Member
Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes

So this may sound like a basic questions, but why is rent due on the first of the month? What about people who want to move during the middle of the month? Other bills in life are billed monthly, but the due date is based on the start date - like my car payment due on the 25th of each month. Has anyone every done a system of rents rolling in based on when they moved in? Or does this have to do with move out notice laws/procedures, like 20 days notice before the end of the month? Is this just the simplest way?

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Nicole A.Pro Member
Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
10y

The 1st is just an easy date. If you based it on the day they moved in, now you have as many due dates to keep track of as you do rental properties! The less work for you, the better. 

If a tenant moves in in the middle of the month, they must still pay a full 1st month's rent. However, the following month, on the 1st, the rent amount will be prorated.

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  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    10y

    The 1st is just an easy date. If you based it on the day they moved in, now you have as many due dates to keep track of as you do rental properties! The less work for you, the better. 

    If a tenant moves in in the middle of the month, they must still pay a full 1st month's rent. However, the following month, on the 1st, the rent amount will be prorated.

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  • Yoochul C.
    Financial Advisor · Glendora, CA · Member since 2015 · 209 posts · 94 votes
    10y

    Probably simplicity.  If I have alot of properties, I don't want to have to know exactly when each rent is due.  When all of them are due on the 1st, just easier.  IMHO

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  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    10y

    @Julie Marquez you could probably do whatever you wanted, but you would be going against the standard. If you have your term set at the 25th, they would move out several days before the end of the month. That could be a problem because it would make it hard to move into the next place. I never change my term when people move in early, I just prorate the partial month and start the lease on the 1st. For me it is easier to stick with the industry standard.

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  • Ayodeji Kuponiyi
    Investor · King of Prussia, PA · Member since 2014 · 1k+ posts · 339 votes
    10y

    @Julie Marquez as @Nicole A. the 1st is simply just simple. I had a tenant move in the middle of the month last October and they paid for half of the asking rent to move in. I wanted them to move in November but they didn't mind paying half of October's rent along with the first and security deposit. 

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  • Justin Fox
    Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
    10y

    It's just for simplicity.  I just have it due on the day they move in.  I wrote an application to keep track of my units and their due dates, expenses, debt service, carrying costs and etc.  It emails me the day before rent is due.  It's still a work in progress but it works for me.  Hell, I would definitely enjoy getting paid 500 - 1000 per day every month.

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  • Brad L.
    Rental Property Investor · Manitowoc, WI · Member since 2016 · 178 posts · 186 votes
    10y
    Simplicity + receiving rent before the mortgage payment is due. Having a self-storage facility, I can't imagine trying to keep track of 45 rent checks all due on different days. That wouldn't end well
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  • Robert Melcher
    Residential Real Estate Broker · San Antonio, TX · Member since 2016 · 506 posts · 311 votes
    10y

    @Brad L. you got it right.  I have a buffer in case i don't get rent, but rents SHOULD be in hand so I can pay the mortgages.

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  • Tami R.
    Clive, IA · Member since 2013 · 141 posts · 89 votes
    10y

    I do mine the 1st of the month for multiple reasons plus also for for court and evictions - - must be in the same month.

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  • Kevin Harrison
    Investor · Woodbridge, VA · Member since 2015 · 476 posts · 197 votes
    10y

    Another thing I didn't see mentioned here is that in lower income (and sometimes higher if they don't manage their money well) units the first is usually a pay day or close to one. This will lead to more people paying their rents before they spend it on something else.

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  • James DeRoest
    Investor · Century, FL · Member since 2015 · 950 posts · 603 votes
    10y

    1st of the month is when many people get paid. Be first in the queue before they spend it.

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  • JD MartinBusiness Member
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    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    If it were done to try to maximize payments, it would also take into account SS checks, disability, etc, and be due maybe on the 4th or 5th since a lot of SS people don't see their money for a day or two after the first. In my utopian world, I'd have tenants paying rent every day of the month so that every day I could see my bank account rising :P  . In the real world, however, the first is a simple day to remember and is also what most renters are used to meeting for a due date. Regularity and simplicity are two keys of profitability. 

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  • Jeff Gates
    Investor · Cathedral City, CA · Member since 2014 · 481 posts · 170 votes
    10y

    Can a landlord enforce the 1st of the month without push back?

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  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    10y

    @Jeff Gates Yes, you can indeed enforce it. It's on the lease. If they don't like it, they don't have to sign the lease and can live elsewhere. If they already signed the lease, too bad. Plus, there's typically a grace period to pay of a few days.

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  • Julie MarquezPro Member
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    Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
    10y

    Thanks everyone, simplicity seems to be key here for the landlords and tenants. 

    But this leads to my next question about the logistics of being a tenant. Say you want to move into a bigger place, and give notice 20 days before the end of the month. Everyone gives their notice on the 10th, so now the pool of rentals is open and you can finally start looking for a new place. Then you move out on the 30/31. But your next place isn't ready until the 1st, or later for a couple days of cleaning and turnover. Now every single tenant and landlord is on the same schedule, whereas I see irregular scheduling of rent/tenancy/termination could provide more flexibility for the tenant. But of course we want to make simple rules that protect the landlord too.

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  • Nicole A.Pro Member
    Rental Property Investor · Baltimore County Maryland and Tampa Florida · Member since 2013 · 2k+ posts · 2k+ votes
    10y

    A renter doesn't have to move in on the 1st of the month. They could also move out at any point they wanted, but they're just financially responsible for their term of the lease.  People are moving in at random days of the month all the time. I have a lady moving in this Saturday, the 14th. 

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  • Julie MarquezPro Member
    OP
    Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
    10y

    @Nicole A. Got it! I think what I've seen in a very hot north Seattle market has really screwed up how rental process regularly works in the world. There is hardly time for a turnaround on great rental deals here.

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  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    10y

    I try to have a week or two of space between tenants so that there's enough time to properly clean and do any repairs/maintenance that need to be done. If a new signed tenant tells me they have to be out of their place on the 31st, and my unit is vacant before then, I let them move in early. If it's a few days or so I give them the extra days for free, if it is 7 days or more I pro-rate on the lease. I have not personally had a tenant leave on the 31st and the new one scheduled to come in on the 1st,  at least not so far. 

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  • Kevin Harrison
    Investor · Woodbridge, VA · Member since 2015 · 476 posts · 197 votes
    10y

    I have never had them that close. but I have had a tenant move out on a Friday and a new tenant move in on Monday. you just have to be prepared and make the most of that window. You should already know ahead of time if you are going to need to do some major work that will take longer than that.

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  • Julie MarquezPro Member
    OP
    Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
    10y

    @JD Martin @Kevin Harrison It sounds like my outlined scenario usually isn't the norm, and landlords and tenants seem to make it work. I didn't know if by off setting the rent due date would change how turnover and vacancies were handled, but you guys all make it work.

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  • Kevin Hunter
    Rental Property Investor · Carlisle, PA · Member since 2013 · 1k+ posts · 543 votes
    10y

    The 1st is the day the rent is due so that your tenants are never living in your property for free.  Remember, they are paying forward.  The payment you receive is to allow them to reside in your property.  IMHO......

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  • Julie MarquezPro Member
    OP
    Investor · Skagit County, WA · Member since 2016 · 1k+ posts · 807 votes
    10y

    @Kevin Hunter But what if they move in on the 20th, pay one month's rent, and pay on the 20th of every month?

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  • Kevin Hunter
    Rental Property Investor · Carlisle, PA · Member since 2013 · 1k+ posts · 543 votes
    10y

    @Julie Marquez, my suggestion is you prorate it.  You have them pay the first 10 or 11 days, then another rent check is due (2nd best), or have them pay for the remaining 10 or 11 days in addition to the entire following month. 

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  • Account Closed
    Investor · Henderson, NC · Member since 2016 · 484 posts · 208 votes
    10y
    Originally posted by @Kevin Hunter:

    The 1st is the day the rent is due so that your tenants are never living in your property for free.  Remember, they are paying forward.  The payment you receive is to allow them to reside in your property.  IMHO......

     This is an important distinction. Unlike other bills you pay AFTER using services, such as a phone bill, electric bill, or a doctor...it is customary to pay your rent before you make use of the space provided.

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  • Mike Dymski
    Investor · Greenville, SC · Member since 2016 · 5k+ posts · 13k+ votes
    10y

    I purchased an apartment complex and inherited leases with rent due dates spread throughout the month.  Even with technology, it was a nightmare for the PM to enforce due date and late payment compliance and it took her a few months to get all units on a normal schedule.  Too much room for noncompliance and inefficiency having to monitor and discuss it all month rather than at one time.

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  • Michael Noto
    Real Estate Agent · Southington, CT · Member since 2008 · 5k+ posts · 3k+ votes
    10y

    As you scale up having rents due on all different dates is a nightmare to keep track of. 

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