Content of the material
- 1. Its a tough market for landlords. Use that to your advantage
- Offer Something in Return
- 3. Visit similar properties
- How You Can Negotiate Your Rent
- 1. Do Your Research
- 2. Prepare Your Bargaining Chips
- 3. Contact Your Landlord or Property Manager
- 4. Be Clear, Respectful, and Patient
- 5. State Your Case
- 6. Explain How Your Landlord Will Benefit
- 7. Put It in Writing
- 8. Use a Rental Negotiation Site
- How to negotiate rent as a new tenant
- 3. Think about anything else you might be able to offer
- Why Should You Negotiate Your Rent
- Better Relationships
- Better Value
- Frequently asked questions
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."
Offer Something in Return
What’s going to make the landlord or property manager agree with you and offer you lower rent? Well, it may take offering him/her something in return. If you’re dealing with a small property management company or an independent owner, you can offer to help with maintenance work (small repairs only) in your unit rather than filing a maintenance request. Your landlord or property manager may be more willing to compromise on the cost of rent, as this will save them time and money on simple repairs.
While offers such as this may intrigue some landlords or property managers, it may not be enough to sway (or be acceptable for) big-time property management companies – but it never hurts to ask! In another scenario, you could offer to pay several months’ rent upfront. This will prove that you have the funds to pay a higher rent, but you’re just hoping to spend less on rent and save more for future endeavors. Depending on what situation the landlord or property manager is facing with their properties, they may be willing to make this type of compromise with you – more upfront for them equals less overall rent for you.
You may find that negotiating lease length is an option, as well. Maybe you were wanting to sign a six-month lease, but that rent was going for $1,300. But the landlord or property manager agrees to negotiate on rent with you, and comes back with a 12-month lease for $1,150. If you’re able to sign a year-long lease and stay put for a bit longer than you anticipated, then paying less in rent may work for you this way! You’ll be paying more overall, but you’ll also have a home for six extra months at a lower rate than what you’d be paying for a shorter lease. Weigh your options!
3. Visit similar properties
Knowing what comparable properties (comps) offer in a certain rent price range helps a renter assess the real value of a place – and gives you negotiating power if you decide to apply. So tour as many properties as you can before making any rash decisions to really learn the rental market in an area. If you are being billed premium rent prices but the craftsmanship is shoddy, you’re not getting your money’s worth. You could then negotiate repairs or upgrades before moving in, a cheaper rent for false advertising, or a smaller security deposit. It also pays to have some basic knowledge of what home inspectors look for when assisting new home buyers. Do some research on home inspection standards so you get a better-trained eye for things like good water pressure and other system operability. Don’t worry – you don’t need to get obsessed with the details, but having a general awareness of potential issues will help you know what’s fair – and when you can reasonably request a rent reduction. You want to be armed to address such concerns in the walkthrough and lease negotiation stages.
How You Can Negotiate Your Rent
Now that you know the best time to negotiate your rent and what to ask for, we need to address tactics. Negotiating isn’t easy for everyone. And if you’re going to get the edge and save on your rent, you need to be prepared. Here are some tips to help you get the best results.
1. Do Your Research
Before you do anything else, check the price of flats in your neighborhood. Look for apartments of similar size and quality. And compare the prices to your own. If the housing market values your area to more than what you would pay, chances are, you can’t negotiate a lower rent easily.
It’s also worth considering how much you’re willing to pay. Always approach your rent negotiations with a price limit.
2. Prepare Your Bargaining Chips
Although you may get lucky, it’s doubtful that your landlord will just drop the price out of the kindness of their heart. As a tenant, you have certain bargaining power when it comes to negotiating your rent.
3 things you can offer your landlord to convince them to lower your rent:
- Offer to stay for longer: Landlords love a reliable tenant who stays for a long time. If you can imagine yourself staying in the same apartment for 2-3 years, make sure you mention that.
- Offer to pay in advance: If you’re in a financial position to pay rent several months in advance, you can negotiate to pay your rent with a discount.
- Offer to buy/do something that raises the property’s value: Whether it’s painting the walls or investing in a new TV, landlords appreciate a tenant who takes care of their property. Offer a service like this to lower the price of your rent.
3. Contact Your Landlord or Property Manager
Once you’re ready, contact your landlord or property manager. Don’t attack them with demands to lower your rent immediately. Instead, send them an email or a text asking to talk about something concerning your lease.
This is crucial. How you approach and talk to your landlord could easily make or break your case. So, you want to set the right stage for your negotiations.
4. Be Clear, Respectful, and Patient
Your success depends on clear communication. Remain respectful, calm, and professional when you’re talking to your landlord. This can help you better negotiate your rent while building a stronger relationship between you and your landlord.
5. State Your Case
First, explain why you’d like your rent lowered. Perhaps the housing market adjusted. Or you found flaws in your apartment that lower its value. If you can back up your claim with evidence, your landlord may be more inclined to help you.
6. Explain How Your Landlord Will Benefit
You can’t expect your landlord to give up their earnings easily. Make sure you include why you think you paying them less actually benefits them. This is the time to pull out your bargaining chips. Stay longer, pay in advance, or offer to fix something in exchange for their goodwill.
7. Put It in Writing
This is perhaps the most important step in negotiating. Once you convinced your landlord and they agreed to lower your rent, make sure you have the agreement in writing. Whether that’s in a new lease, a renewed contract, or additional paperwork, make sure you both sign it legally.
Should your landlord change their mind later, you need to have their consent in writing.The last thing you want is to have legal troubles after you’ve taken the time to negotiate your rent..
8. Use a Rental Negotiation Site
Negotiating your rent isn’t easy. You need to research, haggle, and bargain to make it happen. While the reward is great if you succeed, there’s a risk that your landlord won’t budge despite your best efforts.
You can skip all seven steps by just using a rental negotiation site like Brixbid.
How to negotiate rent as a new tenant
The best way to go about any negotiation is to make the other person feel like they are winning, too. Despite what you’ve probably seen in television and movies, negotiation isn’t about wheeling and dealing or hustling the other side out of money. Think about it in terms of what your landlord would value in return for offering you a reduced rent.
Here are some ideas to consider:
- Can you prepay for several months at once?Many landlords would be thrilled to not have to worry about chasing late rent payments (it’s a major headache that everyone hates dealing with). If you can pay a few months upfront, your potential landlord might be willing to offer you a monthly discount.
- Can you commit to a longer lease? Obviously, be careful with this one, but if you plan on being there for a while, this could be a big negotiating factor. If the lease in question is for 12 months, ask if they’d be willing to drop the monthly rate in return for signing an 18-month or 2-year lease. Not having to find new renters every 12 months is a good reason to give someone a lower monthly rent price.
- Does the rental allow pets, but you don’t have a pet?Cleaning a unit after a pet-owning resident moves out can cost your landlord or property manager extra time and money. If you don’t have a pet, see if you can use that as a bargaining chip.
- Can you give up a parking spot?If you don’t have a car or don’t anticipate having many guests with cars, this may be something to offer your landlord. They can offer the extra spot to another tenant and offer you a discount in return.
- If there are a lot of empty units in your complex, can you make a deal with your landlord for sending referrals? Word of mouth marketing is strong, and landlords know that. Suggest a referral bonus in the form of cheaper rent.
These are just a few ideas to get you started; the sky’s the limit. As long as you can approach the other side with something in return that they value, your chances of snagging a lower rent are higher.
3. Think about anything else you might be able to offer
If you have enough cash, consider offering several months' rent up front. Landlords may be willing to give a rent discount to tenants who can offer them more money right away.
"A lot of landlords are strapped for cash because a lot of renters are behind on their rent," Mohamed says. "If you can offer it, it's a popular tactic."
Proposing a lease longer than 12 months may also make landlords more willing to accept a lowball offer, she adds.
"Landlords are in a position in a lot of places where they want to secure that rent payment every month. If you're in a position in your life where you can commit to an apartment for two years, definitely use that as a negotiation tool," Mohamed says.
Why Should You Negotiate Your Rent
If you're thinking, "Why should I even negotiate rent in the first place?" the answer is pretty obvious. You can potentially save a lot money. In a country full of cost-burden renters, savings can be very beneficial.
However, negotiating rent can go beyond monetary benefits. Let's dig more into what negotiating your rent could mean for you.
Even if you’re saving as little as $50-$100 a month, that can pay out to a good-sized chunk of $600-$1,200 saved over the course of 12 months. Some people can even save up to $200 a month, $2,400 in an entire year! Talk about (significantly) increased financial freedom!
Saving on rent not only leaves you more money to spend how you’d wish but can also improve your relationship with your landlord or property manager. If done respectfully and calmly, negotiating your rent can be a great way to remind the landlord that you are a good tenant, and open up a stronger and more open line of communication.
If you are concerned that you’re not getting the value for the amount you’re paying, carrying out a negotiation can be a great way to ease your mind by finding out what options are available to you and working out a win-win situation.
Frequently asked questions
What else can I ask for when negotiating rent?
Even if you can’t lower the rent price, you might be able to negotiate some perks that can still save you money. You can ask for lower pet rent or gym fees. Perhaps you can get a free parking spot or additional storage. Maybe the landlord would be willing to install a dishwasher or a washing machine in the apartment. Think outside the box about amenities you might like.
Can I negotiate rent with an apartment complex?
You may or may not be successful in negotiating rent with an apartment complex or negotiating rent with a property management company. Some complexes use dynamic pricing models that change each day depending on occupancy levels, and they may be unwilling to deviate from their modeling. Others take a more traditional approach, setting prices and then negotiating them on a case-by-case basis. It never hurts to ask whether the price is firm!