Last summer, my rent changed by $150. This is a normal thing for city dwellers, but my experience was anything but normal. Because rather than my rent increasing, it dropped by $150
It all started with a text message, and I’m going to show you how to negotiate rent down so that you can pay less than you do now.
I’ve lived in my apartment for three years, always pay my rent on time, and never cause disturbances. I am a good tenant.
In May 2020, though, I noticed that my local real estate market was crumbling, and decided to send my landlord a text message. Here’s what I wrote:
Hi [landlord], I’ve noticed that the rent prices in our neighborhood have dropped substantially over the past few months. For example, there are several larger, newer apartments close by available at lower rents (see [link] and [link]). COVID-19 also seems to be placing downward pressure on long-term prices for renters.
With these things in mind, I’d like to request a 25% reduction to my rent. If you aren’t able to offer that, I understand, though I’ll have to make other arrangements. Thank you.
It Never Hurts to Ask
To my surprise, within an hour my landlord had offered me a 15% reduction instead, which I accepted. And since that day, my monthly rent has been $850, not the $1,000 I was paying before.
Later in this post, I’ll explain why my message was so effective, and how you can apply the same principles — pandemic or not — to negotiate a lower rent for yourself, too.
I never imagined that negotiating my rent down was an option for me. But today, that single text message is still saving me $1,800 per year.
How To Negotiate Rent
Before asking your landlord for a rent reduction, you should first identify that the time and conditions are right. After all, if your landlord denies your request and calls your bluff, you put yourself in a poor bargaining position moving ahead.
Here are two methods for discovering whether it’s a good time to request a rent reduction or not.
1. Talk To Your Renter Friends
Talking about money is taboo in some friend groups, but it shouldn’t be. Chitchat is one of the best ways to stay on top of current financial trends, and lays the foundation for a support system should you need one down the road.
In fact, it was in a casual conversation that a friend of mine told me his landlord had offered him a rent reduction when he informed her he’d be moving out. Our discussion is what got me thinking about my own rent, and proved to be the catalyst in me reaching out and requesting the price decrease.
2. Learn The Market
If chatting with your friends is the passive approach to learning the real estate market, scouring properties on sites like Zillow is the active one. But you don’t need to know everything about real estate to negotiate your lease: you only need to know about the type of home you live in in your neighborhood.
For example, imagine you pay $3,500 a month for a 1-bedroom apartment in New York City. When you look at other 1-beds nearby, though, you notice that they’re renting for an average of $3,000.
You can do this research for any city be it Phoenix, Seattle, St. Louis, Orlando or San Jose.
This comparison can be a strong indication that you’re overpaying, and that your landlord may have a difficult time finding someone else to move in should you decide to leave. Having this information at hand can be incredibly powerful when it comes time for your negotiation.
Of course, you’ll want to get more specific than just home type and neighborhood: you should consider size, amenities, age, and other factors when doing your research. But if you find a few similar homes to yours available at significantly lower rents, you’re probably on to something.
5 Tips For Negotiating Your Rent
These five tips will help you prepare to ask for a reduction in your rental payments. It’s not a good idea to go into the negotiation without being armed with knowledge about the market and a willingness to compromise.
1. Play the Tenant Give & Take
Unless market conditions are extremely dire, it’s rare that your landlord will agree to negotiate your rent without getting anything in return. Generally you’ll need to offer something to make it worth their while, so it’s important to find the levers you can pull in your specific situation.
For example, if the home you live in has outdoor space that requires maintenance, you may be able to negotiate lower rent payments in exchange for maintaining the property (landscaping, shoveling snow, etc.) yourself.
If you live in an urban apartment, you likely don’t have much outdoor space, but you may be able to give back your unused parking space, which your landlord can peddle to another tenant. There might be other duties you can take on such as keeping the lobby clean or simply keeping an eye on the property. Not all complexes have 24/7 staff.
As in all negotiations, the key is to offer something that’s low value to you (eg. your parking space) but high value to them. Many landlords will happily lower your rent if you tick one or several of these boxes:
Prepay several months in advance
Sign an extended lease
Offer to extend the termination notice from 30 days to 60 or 90 days
Promise not to smoke or have pets in the apartment
Most landlords are willing to accept lower rents in exchange for financial security, which is why renters who offer peace of mind in the form of extended leases and termination notices are so valuable.
2. Timing Is Everything
When you negotiate anything is often just as important as how you negotiate, and this is especially true when it comes to housing. The best time to negotiate a lower rent is one two two months before the end of your lease.
Why one to two months out? Landlords and property managers know that even a short vacancy between two tenants can cost them thousands of dollars, so they’ll be extra willing to strike a deal as your contract is coming to a close. One to two months gives you enough time to give them notice that you’ll be moving out, but is still too short a time for the landlord to easily find new renters.
3. Help Your Landlord Get Back On Schedule
Timing isn’t only important when it comes to how far out you renegotiate your lease. It’s also a larger, constant concern for landlords, since most housing markets are seasonal.
“If your lease ends in an off-season month (for example, winter in colder climates, summer in hotter places), you can offer to renew for longer than 12 months to align your next renewal in-season,” Rany Burstein, CEO of roommate finder Diggz, said. “Landlords feel better knowing that if you leave, they won’t have to scramble for a new tenant in the off-season, and it’ll be easier for them to find a replacement for you. This is valuable to them, and it’s often worth a small concession on their end. I saved $3,000 on my lease by renewing for 14 months instead of 12.”
4. Leverage Micro Events
There are many small events that impact the balance of power between a tenant and a landlord. For example, if your building is full with a waitlist, you don’t have much wiggle room to negotiate your rent. If there are a lot of vacancies in your building, though, you can likely ask for a discount.
“Landlords generally prefer to have you stay at a lower price rather than spend money on prepping the unit for a new tenant while taking on the risk of the place being empty,” Burstein said.
Similarly, if a nearby building starts undergoing heavy construction — an event that makes your unit less desirable — that swings the power in your favor, too.
“I used this strategy after construction of a new building started across the street,” Burstein said. “I had already been living there for seven years, but I was able to get $200 a month off my rent for that year just by citing the construction as a nuisance I would have to endure.”
5. Leverage Macro Events
Just as micro events between you, your landlord and your building influence rental payments, macro events do, too. This is the main strategy I employed. With the pandemic in full swing, I saw that my local market was collapsing and took action.
You don’t have to wait for a global pandemic to negotiate your rent, though. Financial crises and local events like factory shutdowns impact housing supply and demand just as well. Staying aware of what’s going on in your local rental market means you’ll be poised to act when the market turns in your favor. As the saying goes, never let a good crisis go to waste.
Most landlords are sensible, risk-averse investors willing to be flexible with tenants who make reasonable requests. Yet most of us don’t even make the request in the first place. The worst that can happen is your landlord says no, and your rent stays the same. In the best case, though, you might just be able to save yourself thousands of dollars a year.
Contributor Jordan Bishop writes on personal finance and hospitality topics. He is the founder of Yore Oyster, a website specializing in financial products reviews.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.