It’s time to negotiate lower rent. Here’s how to do it.
The rent is no longer too damn high.
Median rents are now $1,650 a month, down 2.9% compared to last year, according to data released Thursday from real estate site Trulia; that’s different from even six months ago when prices were still on the rise. What’s more, there has been an uptick in landlords slashing prices on rental listings — with nearly one in 10 rental listings across the nation getting a price cut.
“Rents are cooling for the first time in six or seven years,” says Trulia’s Housing Economist Felipe Chacón. He notes that part of this is that rents began rising relentlessly in 2012 after plummeting during the recession (as people could no longer afford homes), and that this is a sign that the rental market is finally cooling a bit. And it may point to “the return of a more stable national rental market rather than one in which price appreciation was a given and landlords had little incentive to cut their initial listing price,” Trulia notes in the report.
In some cities, the rents are getting cut in particularly high numbers. The percentage of listing that saw price cuts in the San Jose, California area was 19.1% this year (rents here are about $3500 still) — the highest of all 100 cities measured; the San Francisco area (at $4100) was a close second at 18.7%. Rounding out the top five: Denver (16.3%), Seattle (13.9%) and Portland (13.4%). Chacón points out that Bay Area rents have been on a particularly fast upwards trajectory — and many landlords may have been raising rent to keep pace with that and are now cutting rates as consumers get priced out.
Whatever the reasons for the rental markets cooling, now could be a good time for those looking for a new place — or looking to get lower rent on their current place — to negotiate. When you ask for a lower rate, “be respectful, open, and honest,” says Carla Dearing, the CEO of financial wellness site SUM180. You may also want to time your move, if possible, during the slow season, she adds: “Landlords are more eager to find new tenants during certain times of the year. If you can, schedule your move during the winter months and see if you can get a deal on rent.”
Financial advisor Kimberly Foss of Empyrion Wealth Management says that these are good bargaining chips as well:
- Pay several months or a year in advance, in exchange for a discount.
- Help the landlord get tenants, if he doesn’t have enough. “Your free advertising (think Facebook, Twitter, etc.) and referrals of acquaintances who are in the market for an apartment could persuade your landlord to cut you a break on monthly rent,” she says.
- Work on the property in exchange for lower rent, doing things like handyman or yard work. “Your “free labor” could easily save your landlord $50-200/month, some or all of which could be deducted from your payment,” she says.
- Use your on-time payment history and credit score as a bargaining chip. “Convince your landlord that it’s preferable to retain a tenant with a proven record of on-time payments than to rent to someone new and unproven,” she says.
- Ask for an early payment discount.
“Most important of all — communicate early and often,” Foss adds. “If you wait until the day before your lease is up, your bargaining position is severely limited.” And know, of course, that this won’t always work: “Some housing markets are so hot, the odds are stacked against you being able to negotiate a lower rent,” says Dearling. “Still, it doesn’t hurt to ask.”
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