Easy Steps For A Rent Negotiation
There is a common misconception that you can’t negotiate rent. It stems from our everyday life. You go to a movie rental place and you pay a specific price to rent a movie. There is no haggling. Take it or leave it. Because of this we have become accustomed to not negotiating many things. If you were purchasing a house you would negotiate the price. So why not negotiate the rent?
The first thing that you must be aware of is that it would be quite difficult to negotiate the rent on a place that you have already been renting at a certain price. While it is difficult, it is not impossible. There are many reasons to renegotiate the rent in this situation. The main one is that rental values in your neighborhood have gone down. There are two or three FOR RENT signs in your neighborhood. Or perhaps the accommodations have not been up to snuff. Any of these items can lead you to have a talk with your landlord. There is one caveat to negotiating rent in a place that you already occupy. That is that you should be prepared to walk away from the rental at any time. If you really like the situation that you are in then you may not want to make the attempt. You must also be a good tenant. Late rents aren’t going to help your cause.
Steps to Negotiating Rent:
- Research – You must do research before attempting to negotiate your rent. You must find the current value of similar apartments in the neighborhood. This includes number of bedrooms, condition of property, and amenities. You may very well find that you are paying a decent rate already.
- Determine how much you want to pay. This number is going to be a landing spot for you. Preferably this number should still be under the comparable rent for similar apartments. You want a deal.
- Develop a list of reasons why the rent should be lower. For example: market values, non-matching appliances, bad view, three available apartments on the same street at a lower price, etc.
- Ask how much the rent is for the unit you are going to rent. Then offer a lower rent than your landing spot. This will give you room to haggle. If the rent is $600 and you want to pay $550 then perhaps you offer $500. It is low enough that you could meet in the middle for the price that you want to pay. The landlord may just say “yes”. And now you are well below what you wanted to pay anyways. Do not offer an outrageously low price. The landlord may just walk away from you completely and not even want to talk to you.
- Handle objections. The landlord may say that his rental price is a fair value. It is at that point that you discuss your list of reasons why the rent should be lower. Why should you pay more for a rental when the property across the street is $50 cheaper or has an extra bedroom?
- Agree on a fair price. If you think you can do better than the price that the landlord wants, walk away from the negotiation.
Above all this rent negotiation must be fair for both parties. Anytime you enter a negotiation you must remember that if one person loses in a negotiation they will have bad feelings about dealing with the other for a long time. So you shouldn’t try to back the landlord into something that might cause him to delay in fixing your backed up sink later.
One thing to remember is that communities with many properties may have many vacancies. The property is typically run by a manager that needs to fill the properties but can’t. Once he hits a certain level of occupancy he can pay the mortgage, anything above that is gravy. So you may be able to swing a better deal just because he’s just trying to make profit.
Also it is easier to negotiate a rent during the winter months, particularly November and December. A landlord will have a tough time renting an apartment during the winter months because nobody wants to move during the winter or the holidays. People don’t want to deal with bad weather. Therefore, if he hasn’t rented the apartment by October he will be hard pressed to rent it until March. If the apartment is $600 the landlord will lose the rent from November to February which is four months. This adds up to a $2400 loss for the landlord. The landlord is more inclined to cut his losses especially around the holidays. It is true that you would have to move during those months and that could be a hassle, but you can console yourself with the money that you save.
Remember also that landlords do raise rents when the lease is up. However, depending on the state or city that you live in there may be a maximum percentage that the landlord can raise the rent. So your rent negotiation is not just imperative for the immediate year that you are moving into a property. It affects the rents of future years as well.