The number of U.S. cities with more renters than homeowners has more than doubled in a decade, according to RentCafe’s analysis of US Census Bureau data. As interest rates continue to climb and the cost of homeownership get too high for some people in major markets, renting continues to be the preference.
But renters, unlike homeowners who are investing in their home, are never going to see that money again once they’ve paid it each month. So whether you’re in the market for a new apartment or you’re facing a rent increase, it’s always worth trying to bring that price down. Yes, it can be a cringeworthy conversation with your landlord, but if you don’t ask, you’re likely leaving money on the table.
Having lived in New York for 20 years, I’ve negotiated my rent at least 10 times and nine out of 10 times, these conversations have resulted with money back in my pocket. By simply asking for room to negotiate in a polite manner, I’ve been able to save thousands on everything from my monthly rent, to brokers fees and building amenities. I admit, it’s not a conversation I enjoy in the least, but I’ve learned that it pays to suck it up and speak up. Here’s what’s worked for me:
Don’t let your emotions get in the way. This is strictly a business deal so speak in business terms. Scope out the going rate for similar homes in the neighborhood, a.k.a. comparables or “comps” within your search, just like you would do if you were buying or selling a home. Even better: put together a list of similar homes that are priced lower than the rate your potential landlord is quoting you.
Make sure you also know what the current vacancy rate is. If the vacancy rate is high, casually mention it as you’re negotiating with your landlord so he/she is reminded of what they’re up against.
Have a specific rental price in mind. You may need to crunch some numbers so it’s important to do this before you’re on the phone with your potential landlord. Being able to quote what you’re hoping to pay each month will make it easier for someone to respond to.
Let him know you have all the paperwork ready to go. As you’re waiting for a response in the uncomfortable silence, remind him you have the application, bank statements, IDs, and references ready to go immediately, if he’s willing to make it more affordable for you.
Be a good tenant. This helps, especially if you already live in the apartment, and want to renew your lease. You can’t expect anyone to negotiate with you if you’re frequently late with your rent. So pay your rent on time and try to be a considerate neighbor. That way, when your landlord sends you a lease renewal that raises your rent beyond what you consider reasonable or within your budget, he’ll take you more seriously.
Do not negotiate in writing. Instead, meet with your landlord or management company in person or over the phone. Emailing them or writing them a letter will just give them more time to think of a reason to refuse your request.
Bring up the research you’ve done and costs your landlord will have to incur if you move out. This goes back to my point about speaking in business terms. You can start by quoting the average rent increase for apartments in your area. Last year during my own rent negotiation, I got my landlord on the phone and cited the low city-wide average (1.25% for one-year leases on rent-regulated apartments), compared to his suggested 11% increase, along with the 7% vacancy rate at the time. And then I also reminded him about some of the fixtures and floors that are older and need to be replaced when I move out before he gets a new tenant to move in — all things that would cost him time and money.
But even with all that, my landlord was tough and still refused to budge because he hadn’t raised my rent for the past two years (of course, I called to negotiate each time). So I politely thanked him for his consideration, told him I’d visit some open houses over the next week, and requested holding off on signing the lease for a few more weeks. A week later, we were able to come to an agreement that saved me $170 a month, which adds up to over $2,000 a year.
You can do it, too! It’s uncomfortable, yes, but you’ll have an unbelievable sense of accomplishment when you’re able to knock that price down. Remember, your landlord knows it’ll cost him more to find a good tenant, so use that to your advantage.
What are some ways you’ve been able to negotiate your rent down? Share them with me @Jeanie531 or in the comments.