How your weekly/monthly rent is calculated.
One of the most common questions we receive is from both tenants and landlords questioning how their rental amounts are calculated. Although it seems straight forward from the outside, it can often cause lots of confusion.
In Victoria, properties are advertised as a weekly amount but rent is charged per calendar month.
This is generally what causes most of the confusion. The most common mistake that’s made is by multiplying the advertised weekly amount by 4. Eg. $500 x 4 = $2000 to get the monthly figure. But this method is incorrect, the actual monthly rent for a property that’s $500pw is $2173.
There are any number of different methods to calculate your rent but the simplest way to explain this is to use an example.
Let’s use $500 per week as example.
• Step 1 – $500 /7 days = $71.43 per day
• Step 2 – $71.43 x 365 days (per year) = $26,072 (rounded up to the nearest round figure.)
• Step 3 – $26,072 per year / 12 months = $2,173 per calendar month.
Should you be unsure about the calculations feel free to ask your leasing consultant or property manager for further clarification.