How to Negotiate the Rent on Your Apartment
Many people are uncomfortable negotiating the rent on a new apartment. In the U.S., with few exceptions (such as buying a car, or a home), we are accustomed to paying the price that is listed without question. For most people, your rent will be your largest expense in the coming year, and if you can save money with a little negotiation, why not? While it is true that not all landlords will negotiate, you might be surprised at how many will. This applies both to new leases, as well as lease renewals.
Rent Negotiation Guidelines
1.) First Things First: Know the Market
One of the most obvious foundations to successful rent negotiations is knowing the market. Just a little bit of online research (such as here on Urban Edge) can often tell you such valuable pieces of information as the price of similar units, in the same or similar neighborhoods; the price your landlord is charging for the same-sized and appointed apartment in a nearby building; and sometimes how long a specific apartment has been empty before you came along. For obvious reasons, all of the above can give you a good indication of your future landlord's willingness to negotiate the rent.
Most importantly--be realistic. Don't lowball your offer, or the landlord may assume you're not negotiating in good faith. You should be able to show the landlord lists of other SIMILAR apartments that are lower in rent that what he is offering. Remember, it's all relative... luxury buildings cost more than standard buildings, and citing prices on apartments in a different neighborhood can be like trying to compare apples and oranges.
Another factor can be the number of brand new buildings in a neighborhood that are doing their initial lease-up. One new building in a large neighborhood may not mean as much, but several large complexes or towers (all with many units to fill at the same time) can mean temporarily lower rents as the market is flooded with similar units. However, a temporary glut of brand new, gleaming luxury buildings doesn't necessarily equate to lower rents in older, walk-up buildings. They are serving, in most cases, two different markets.
How hot is the rental market in your city? Landlords are less likely to negotiate if they know that it will be easy for them to rent to someone else. For example, landlords in prime neighborhoods in Manhattan are much less likely to negotiate, because they generally have much lower vacancy rates than landlords in other cities.
Particularly for high-rise buildings, where the apartment is located can make a big difference. Landlords typically charge more for higher floors, and/or for exceptional views. So, be realistic. You're not going to get a 25th floor Park Avenue view for the same price as a 5th floor alley view in the same building. Keep that in mind.
Time of year can make a difference. Many cities are busiest in late spring into summer/early fall in terms of rental activity, and tend to be slowest in November and December. You will have better luck in the slower months.
Are you already in a rent stabilized (or rent controlled) apartment? Then there's a good chance you're already paying at or below market value. Negotiating the rent in these circumstances is usually a waste of time, especially for renewals. Pay the rent and be happy your friends are all paying more than you are.
2.) Make Your Offer a Win-Win Situation
The key to any successful negotiation is ensuring that both parties are getting something from the deal. For example, landlords would much rather sign a qualified tenant to a two-year lease than a one-year lease, thus ensuring that he or she won’t have to find yet another renter only twelve months from now. In fact, some landlords prefer the two-year lease so much that we've seen them give tenants the 24th month for free (the same offer can often be negotiated when it comes time to re-sign your lease, by the way).
Other win-win techniques we've seen work in the past include offering a larger security deposit (say, the equivalent of two-months' rent instead of the usual one-month) in exchange for a lower rent; a willingness, if the timing is right, to move in—and start paying rent—immediately, in mid-month, rather than waiting until the first of the next month; or offering to sign, say, an 18-month lease in the winter, so your tenancy will end in the summer, during the prime moving months when it will be easier for the landlord to re-rent the apartment.
If you can, offer to prepay some or all of the rent. The landlord can earn interest on the money, which might offset a slightly lower rent.
If you're dealing with a small landlord, not a large pro, offering to help out with maintenance around the building (assuming you're qualified), lawnwork, painting, shoveling the walk, etc. might net you a lower rent in exchange for your services. But, you MUST be prepared to follow-through when needed.
3.) Which Landlords are Most Likely to Agree to a Lower Rent?
If you're dealing directly with the landlord (not a broker), you have the opportunity to sell yourself as a model tenant: dress nicely, be polite, have all of your paperwork organized and at hand. You want to appear to be someone who will pay on time and not cause any trouble, both of which any landlord may be willing to "pay for" in the form of a lower rent. Do you have any references from prior landlords? Include them when presenting your offer.
This is especially true in the case of small property owners, because while large building managers and landlords tend to focus almost exclusively on credit scores and the like, the smaller owners are also often interested if you're the right "fit" for the building, and may be willing to lower the rent a bit to get a good neighbor (many small owners live right in the building).
In other cases, the smaller owners are not "professional" landlords, e.g. they have a separate career (or are retired), and own a building or two as an investment. In those cases, they may be handling everything themselves, on top of their full-time jobs, and will be looking for tenants who not only can pay the rent, but will cause them the least amount of "hassles."
If you're renewing your lease, and you've not caused any complaints or problems for the landlord (or your fellow tenants), now would be a good time to remind your landlord of that. Also, keep in mind that "causing hassles" may be a matter of opinion. While you may be perfectly within your rights to call monthly to complain about something that needs fixed in your apartment, keep in mind your landlord may see that as someone who is high maintenance, even if the repairs are necessary.
4.) When Should I Make an Offer?
While some people recommend putting an offer in with your application, there can be some pitfalls with that. For example, if the landlord has numerous applications, all other things being equal (income, credit, the impression you create), the owner will most likely give the apartment to the tenant who isn't asking for a lower rent. Ask if the landlord has, or is accepting, other applications. You may not always get a straight answer, but if they tell you you're the only one (at that moment), you may try giving them an offer with the application, if you wish.
If there are multiple applications, it might be wise to wait until you're approved. At that point, the landlord wants you in the apartment, and if they are amenable to an offer, they may accept it just to close the deal. However, keep in mind that because they have multiple applications, there's a chance another similarly qualified applicant is waiting to take your place. Use your judgement, and if you really want the apartment and the landlord gives you a lot of pushback, you're probably better to drop the negotiating and take it as offered.
An exception to this would be if you are offering something other applicants may not be, e.g. to move in immediately and start paying rent (vs. the first of the next month). In that case, placing the offer to do this in exchange for a lower rent (or free month later) with your application, may give you the edge you need in getting approved over the other candidates.
We do not recommend that you try to negotiate at the lease signing. Unless you sense the landlord is anxious to get you in the apartment, at this point the leases have been prepared, and the landlord won't want to redo them, and may not appreciate you trying to change the terms at the last minute. Even if you get what you want, you are starting your relationship with the landlord on a bad note.
If you are renewing your lease, don't wait until the last minute to negotiate. If you do, you could find yourself out on the street! Know your deadlines, usually spelled out in your current lease. If you have to provide notice 30 days in advance, and you wait until then to make an offer, it might be too late to sign the original renewal offer if the landlord doesn't want to negotiate. Leave yourself enough time that if you have to accept their offer, you have plenty of time to do that before you are bound by your lease to give notice.
5.) Like Nike, Just Do It!
Even if you are presenting a verbal offer to the landlord, always follow it up with something in writing. It can be a simple letter or memo, signed and dated. Be sure to include the address and unit number with the offer. If the landlord is offering a lease renewal, do NOT cross out the renewal price and sign the agreement. Offer a lower rent, and if accepted, the landlord should prepare a revised renewal for you to sign. If they do make changes to the original document, make sure they initial and date the changes to reflect that they agreed to them.
When negotiating, while it's OK to express your interest in the apartment, don't overplay that card. If the landlord thinks you see this as the perfect apartment, they are more likely to assume that you won't walk if they turn you down for a lower rent. You might want to talk about how you are a good fit for the apartment--again, make it a win-win. Tell the landlord why they should want you in the building, as much or more as how much you want to rent this apartment.
Explain past mistakes in advance. If you know a very unique situation hit your credit score a few years ago, or prevented you from paying rent on time, address it up front, and explain why it won't happen again. Some landlords are more understanding and willing to give you a chace,
6.) Alternative Items to Negotiate
For various reasons (often bookkeeping), the landlord may not want to offer a lower rent. That doesn't mean there aren't other ways to basically achieve the same thing. If the building has amenities that cost an additional fee to use, you could try getting that included in the rent. Ditto for parking. Or, rather than taking $100/month off the rent, perhaps the landlord would agree to give you the first or last month of the lease for free, which will save you a similar amount of money.
7.) When Shouldn't I Try to Negotiate with the Landlord?
As we've already mentioned, if your apartment falls under rent stabilization or rent control, in most cases you don't have a lot of room to negotiate, if at all. Probably the most common time not to negotiate is if you have bad credit and are borderline getting accepted. In that case, be happy that the landlord is willing to give you a chance.
Another time not to negotiate is if the apartment is already a good deal (the landlord will know it, and will also know it will be just as easy to rent to someone else). Grab the deal, enjoy, be an ideal tenanat, and then at lease renewal time you might have some leverage to minimize any rent increase.
If you have been in court before with a landlord, even if you won the case, your chances of negotiating are greatly reduced. Many landlords will run a housing court check, to see if you have have ever sued (or been sued by) another landlord. Many landlords do not care if you won the case or not... the mere fact that you ended up in court with a landlord sends out red flags. Again, don't push your luck.
If you've been a "problem tenant" (remember, that's in the eyes of the landlord), the landlord may not be so charitable when it comes to a lease renewal. In fact, they may offer a renewal at a much higher price, hoping you will move. Problem tenants can include those that complain to the landlord semi-frequently (even if you have legitimate complaints), or those that other tenants complain about frequently (e.g. loud noise is a common complaint).
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