You CAN Lower Your Rent!
As a landlord myself, I only wish the four tenants who moved out last month had read this post.
The most dreaded piece of paper for any renter is most likely a rent increase notice.
In rising rental markets, most tenants can set their clocks by how regularly these rental increase notices are distributed. When the trend reverses, however, and rents have declined, few tenants take the initiative to request a subsequent decrease in rent. Unfortunately, many tenants opt to move and pay moving costs because they believe that their rent is not negotiable once they move in. WRONG!
Unless you have been a terrible tenant, your landlord most likely does not want to see you leave. Vacancies are very expensive, and one vacancy can cost landlords thousands of dollars in unit repairs, advertising costs, new tenant incentives and/or concessions, and — most importantly — the loss of rent until the unit is filled. For these reasons, prolonged vacancies (particularly in today’s market) greatly affect a landlord’s ability to profit.
Most landlords know that rental units are commodities whose value is influenced by supply and demand — just like any other commodity. It’s highly likely that in recent months, the value of your apartment has gone down. Here is what you need to do to get your landlord to lower your rent:
1. Conduct a rent survey. Take the time to survey the available units in your neighborhood by finding 3-5 comparables. Pay close attention to the unit amenities and comparability of the unit and the building when determining whether or not it is similar to your unit. Be sure to only compare the same type of unit (i.e., 1 bd + 1ba, etc.). Find out how long the unit has been vacant and whether or not the landlord is offering rental incentives and/or concessions, which would lower the overall effective rent.
2. Do your research. The Wall Street Journal recently reported that national vacancy rates rose to 7.5% in the 2nd quarter of this year. The record high was 7.8% in 1986. Take some time to research vacancy rates in your local area. While your landlord may be aware that vacancy has gone up, they may not be aware of exactly how high the rate has risen and how long units are staying vacant.
3. Be smart. The best time to negotiate is when you are under a month-to-month rental agreement or close to the end of your lease. Additionally, summertime is traditionally the season when most people move. Your landlord may already be feeling the crunch with vacancies. Time is of the essence.
4. Be specific. Clarify the rent and terms that you are requesting by issuing it clearly in writing. Less is more. Let your rent survey speak for itself and be as concise as possible. As always, leave room for negotiation.
5. Be creative. If your rent survey proves that your rent is already low, or if your landlord initially says no, you might need to get creative. Offer to help with on-site duties or repairs for a rent concession. You might also consider requesting one month free, spread out over the course of a year in exchange for a longer term or new lease.
Once you’ve done your job and presented your case, your landlord has a business decision to make. As a landlord myself, I may not want to receive a “rent decrease notice,” but it’s definitely better than a “notice to vacate.” I only wish the four tenants who moved out last month had read this post.
Have you ever negotiated a reduction in rent? If so, what tips do you have and how much were you able to save?