Content of the material
- 1. Its a tough market for landlords. Use that to your advantage
- 10. Evaluate your heating bills
- 3. Think about using your lease term to your advantage! If you plan on renting for a longer period of time, you can try asking for a discount
- When to negotiate rent
- 13. Negotiate to pay several months in advance
- 3. Sell yourself as a good tenant
- 5. Be ready to carry on small repairs:
- 3. Let your landlord know about your available options:
- 4. Ask for a Two-Year Lease
- 5. Rent isnt the only thing you can negotiate
- Inquire about extending the lease
- How to negotiate rent as an existing tenant
- Get your negotiation in writing
1. Its a tough market for landlords. Use that to your advantage
Now is a great time to sign a new lease, Allia Mohamed, CEO of openigloo, a startup that gathers public information on New York City buildings and landlords to help renters make their housing decisions, tells CNBC Make It.
"Before [covid], things were a bit different," Mohamed says. "People would offer more money to secure an apartment before someone else. Now, there's more options on the market and renters have choices."
While negotiating might have once landed your application in the reject pile, it is now something landlords will engage with, particularly in cities that saw large chunks of their populations flee to the suburbs.
"I think pre-pandemic, landlords didn't expect you to negotiate, especially when there was a line of people waiting for an apartment," Mohamed says. "In these conditions, negotiating your rent is so common that almost everyone is trying to do it."
Renters who want to renew their current lease have the most leverage, Mohamed explains, because landlords would rather avoid foregoing rent while they clean, paint and do repairs on an empty unit.
"Assuming you're a good tenant and you pay your rent on time, the landlord should be trying to keep you in the apartment," she explains. "Being in that position gives you a little bit more leverage than normal."
10. Evaluate your heating bills
Whether your heating system works with electricity or gas, high heating bills can help you negotiating a rent decrease. Above average heating bills are usually a sign of your apartment not being well insulated. One of my rent negotiation tips is to put this forward so it is reflected in the rent reduction.
3. Think about using your lease term to your advantage! If you plan on renting for a longer period of time, you can try asking for a discount
When to negotiate rent
- At the end of the month when prospective landlords and property managers are looking to fill vacant units and you are looking for a new apartment.
- Before your lease expires if you are looking to stay in your current unit and negotiate your monthly rent. You should start negotiations 60-90 days before the end of your lease term, or when you receive your lease renewal packet.
- During the winter months when rental inventory is higher and less people are looking to move. Seasonality affect the rental market, and you may have more bargaining power in the colder months.
- When you are signing a longer lease term than twelve months. Landlords and property managers may be more willing to negotiate your rent if they know you will be occupying the rental for longer than the typical one year lease term.
13. Negotiate to pay several months in advance
Rent is usually due once a month. However, if you can afford it, paying several months of rent in advance can be a good way to negotiate a rent decrease.
Think about it. First, landlords have bills to pay and financial goals too. Second, if there is one thing they don’t want to be doing, it is chasing after last month’s rent. Paying several months in advance is attractive to your landlord for those two reasons. They will have peace of mind knowing rent has already been paid for the months to come. And this means they will know they can trust you. In exchange, you can negotiate a monthly discount.
3. Sell yourself as a good tenant
Looking for another lesson on how to negotiate rent? If you’ve never rented in that particular complex a few letters of recommendation from personal references will go a long way toward convincing a manager you’d be a tenant worth having, even at a lower rate.
Think of it as a resume for your living situation. Get a letter from previous landlords or apartment managers which say you pay your rent on time and don’t cause problems. Get letters that speak to your character from a former boss, neighbor, someone in a non-profit organization or your church. Just like in a job interview, these professional references can help you negotiate rent and sell yourself as a good tenant for your potential new landlord.
If you’re trying to renew your existing lease at a better rate, remind the manager that you’ve always paid your rent on time and anything else that’s positive. Have you kindly alerted them to maintenance concerns? Have you helped in an emergency? Have you assisted during holiday parties? These situations can go a long way and help you lower the cost of rent on your upcoming lease.
5. Be ready to carry on small repairs:
Tell your landlord that you can pay for minor repairs from your own pocket and won’t bother him for such issues. This tip may come in handy as most of the landlords find it pretty frustrating when their tenants come on their doors every month with the request to carry on some small repairs.
A better idea is to make a list of minor repairs that you can carry on your own in order to avoid any last minute hassles. While negotiating for an extension of lease, you can point out the repairs that you carried out even though the contract states that it is their responsibility.⌄ Scroll down to continue reading article ⌄ ⌄ Scroll down to continue reading article ⌄
3. Let your landlord know about your available options:
Just like an offer in hand that can help you to ask for a better pay packet from your current employer, it may be much easier to negotiate with landlords when you have some options in hand. Use this strategy as leverage to build a strong case in front of your landlord. If the apartment has been vacant for a long time, then make your landlord realize that it would be fruitful to negotiate a deal, else it will be an additional cost on his part.
4. Ask for a Two-Year Lease
Speaking of flexibility, if you know you’re intending to stay put in your rental for longer than a year, use that to your financial advantage. In many cases—and according to realtors—landlords are more open to a price reduction (or a reduced rent increase) if they can bank on you being a long-term tenant. (See above about turnover costs.)
5. Rent isnt the only thing you can negotiate
While some landlords might be unwilling to negotiate on rent, that doesn't mean they won't make concessions. You can ask your landlord to cover a utility you normally pay for each month or if they will replace old appliances with newer versions.
Even if you are happy with the rent you pay and don't have any issues with your apartment, that doesn't mean you can't ask for something. Mohamed recommends asking landlords if they would offer a rent credit for referrals, explaining that in many cases landlords might be happy to throw a $500 credit your way if you bring them a new lease.
"Ultimately, you don't get what you don't ask for," she says. "I think every tenant right now in this market should be trying to get some kind of concession in any way they can."
Inquire about extending the lease
Showing that you plan to stay in your apartment for a substantial length of time can demonstrate that you’re a stable investment. If the lease is annual, offer to extend it to 18-24 months in exchange for keeping your current rent. If the landlord knows he or she won’t have to take a risk with a new tenant, this could be a good compromise.
How to negotiate rent as an existing tenant
Admittedly, negotiating rent for an apartment you already live in is a bit harder (but not impossible). The biggest obstacle to overcome is the lack of leverage; you already live there, so why should your landlord drop your rent now? It’s all about how you frame the negotiation.
For starters, everyone’s life would be a bit easier if you just stayed. Assuming you’ve been a good tenant, your landlord likely wants to keep you around. You probably don’t want to deal with the hassle of moving out, either. With that in mind, it’s in both parties’ best interest to come to an agreement.
Here are the steps to take when negotiating lower rent as a current resident:
- Do your research
Before doing anything else, is to see what the rent is for comparable apartments in your area. If you find that other places in your area are renting for less, start making a list of examples. The more data you have, the better. Obviously, if you find that you are already paying much less for your unit than the norm for your area, you may not have much luck in negotiating.
- Put your request in writing
If interested in negotiating rent, now is the time to compose a formal email or letter to your landlord with your request. Use this letter as an opportunity to highlight your value as a renter, while including your research findings. Be polite and courteous but firm in your intention. When you’re ready to compose your correspondence, check out our sample letter for negotiating your rent to use for your rent proposal.
- Counter if necessary
If your request to lower your rent comes back with a denial, don’t be afraid to continue the conversation with a counter offer. Consider adjusting the amount you had requested, or suggest a compromise. Perhaps you are in the position to sign a longer lease term if the new rent price is agreed upon. Landlords want to keep units occupied by responsible tenants, and may see the value in keeping you as a renter long term versus the time and hassle of filling a vacant unit.
Get your negotiation in writing
As with many things in life, you can ask for and negotiate anything — including rent. If you’re a good tenant, can be persuasive and ask for what you want and need, you can negotiate the terms of your lease and rent prices and walk away with a lower rental rate.
After you’ve worked out a reduced rate with your landlord, make sure you get the new deal in writing so you have a paper trail and proof of your newly negotiated rate.