Living is particularly expensive these days amid skyrocketing inflation and housing prices. That’s why if you’re a renter, it may be worth trying to negotiate your rent before you sign a lease, especially since it may go up this year.
According to the Fannie Mae Home Purchase Sentiment Index survey released in March, 69% of approximately 1,000 homeowners and renters said they expected rental prices to climb in 2022. The national median rent for a two-bedroom unit as of February 2022 was $1,985, a 20.4% jump over the previous year, according to Rent.com.
Experts advise treating signing a lease like you would entering into any business deal. So can you negotiate rent? Yes, rent is negotiable in a handful of scenarios if you know how to ask.
[Read: Renting vs. Buying a Home: Which Is Smarter?]
How to Negotiate Rent
Negotiating rent isn’t easy, and the type of rental property matters.
“Owner-managed properties are easier to negotiate,” says John Kilpatrick, managing director of Greenfield Advisors, a Seattle consultancy that focuses on real estate, economic, financial and data needs. “If you’re trying to rent from a property manager or a large REIT, you’re probably out of luck.” A REIT is a real estate investment trust, which holds and may operate income-producing real estate, like a large apartment building.
So if you’re planning to negotiate rent, your best bet is a landlord who is renting out one, two or a handful of small properties. When negotiating rent, keep these strategies in mind.
Consider nontraditional rentals. As Kilpatrick says, it’s not likely you’ll be able to negotiate rent in an apartment building that has 700 units and 800 families or individuals vying to get in. His suggestion: “Look for unique living situations, such as live-in caretaker for an elderly person, church sexton or short-term off-season rentals in vacation areas.”
If any rentals that you look at seem run down, Kilpatrick says you might be able to negotiate. “Look for a fixer-upper with some mild blemishes that can be cured with some elbow grease and sweat equity. Offer to donate labor to paint, clean the yard, landscape and so on,” Kilpatrick says.
Offer to sign a longer lease. If you offer to sign an 18-month or 24-month lease, for example, you might get a landlord to lower the monthly rent.
“Some landlords want the security of a long-term tenant, and offering a longer-term lease may offer you some negotiation room,” says Robert Carrillo, a property manager with 10 years of experience with Century 21 Haggerty in El Paso, Texas.
Offer to pay the rent upfront. Not just a month or two — an entire year.
“Now of course very few tenants have the financial means to do this,” Carrillo says, “but the security that you will provide the landlord in knowing that the rent is guaranteed for a year will often lead to success in getting that rent rate down.”
That said, this is a risk even if you do have the money. What if your landlord isn’t an honest person and something goes sideways? Or you could have a financial emergency and no extra cash to fall back on. You’d really want to think this through.
[See: The Best Places to Live in the U.S. for Young Professionals.]
How Much Rent Is Typically Negotiable?
Carrillo says he has seen tenants sign a two-year lease and see their rent lowered by about $50 to $100 a month.
Meanwhile, Rany Burstein, CEO and founder of Diggz.co, a rental search and roommate finder app, says he once renewed a 12-month lease to 14 months and saved $3,000, or about $214 a month.
It’s notable that Burstein renewed a lease. You’ll have better odds of negotiating if you already live in the space you’re renting.
Nathan Miller, a real estate investor, landlord and the founder of Rentec Direct, a property management software company based in Grants Pass, Oregon, says you may be able to negotiate other things besides rent.
“If your landlord is unable or unwilling to budge on rent, consider other amenities you may be able to negotiate like parking, upgrades to your rental, extra storage or waived fees at the fitness center,” Miller says.
Pros and Cons of Negotiating Rent
You can argue that there are no cons. If you aren’t successful in negotiating rent, what’s the harm? Still, let’s game these out.
Pro: If your landlord says yes, you’ll save money. And you’ll continue to save on rent every month.
Pro: You may get other concessions. If you don’t succeed negotiating rent, you may receive other concessions from your landlord, like new carpet in your unit, new appliances or a fresh coat of paint on your walls.
Pro: You’ll feel good about yourself for trying to negotiate. Especially if you move into a home that isn’t managed by a giant corporation, you don’t want to later kick yourself for not making an attempt to negotiate for lower rent.
Con: You could hurt your relationship with your landlord. No one will likely hold it against you for trying to save money. Still, if you come off as aggressive or demanding or find your property manager or landlord responding in a way that you find unsettling, it could hurt your relationship.
Con: Getting your rent lowered could backfire. If you sign a longer lease, you may find yourself in a bind if you need to move earlier. Or if you pay a year’s worth of rent in advance in exchange for a discount, you could struggle to pay other bills for the next 12 months. The bottom line: If you propose a deal to get your rent lowered, make sure you can follow through on your end.
Tips for Negotiating Rent
Before you try to negotiate your rent, consider this advice from experts.
Keep your credit score and report in good shape. Especially if you’re looking to sign a lease with a new landlord, you will need excellent credit and an excellent background to have any real hope of negotiating. “The landlord doesn’t want to gamble with being stuck with a long-term problem tenant,” Carrillo says.
Emphasize your value as a good tenant. Burstein says that if you’ve been renting a while and are considered a model tenant, you might be able to convince your landlord to make a concession if one is warranted. For instance, at one point when Burstein’s lease was up for renewal, a new building was under construction across the street.
“I was able to get $200 a month off my rent for that year by simply asking and citing the construction as a nuisance that I would have to endure,” Burstein says.
But he adds that he had lived in the apartment for seven years. Clearly, the landlord made the calculation that dropping the rent to keep an excellent customer was worth it at a time when construction issues might have chased other prospective tenants away.
Miller says if you have a good relationship with your landlord, he or she “may be willing to work with you if they are concerned about losing you as a tenant. This conversation is more likely to go well if you have a history of open communication and on-time rent payments with your landlord.”
Don’t discuss renewing a lease too early. Why? Because if you indicate that you may not renew your lease, your landlord might start putting out feelers for the next tenant.
“The shorter window of time a landlord has to market the apartment, the more flexible they will be in a negotiation,” Burstein says. “Your landlord may ask you to know if you intend to renew far in advance. Delay it as much as you can, or as much as your lease states.”
[SEE: The Best Places for Singles to Live.]
Research the property before jumping into a negotiation. For example, knowing how many days on the market this apartment or home has been open for rent, according to Carrillo, can help you make your case. You’ll also want to research what other rentals in the area are charging for similar space, he says.
“Knowing what comparable properties have rented for in the area and combining that with a home that may have been sitting unrented for a while will usually lead to a better chance of success in negotiating,” Carrillo says.
In other words, having the right information might lead you to make a reasonable offer.
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Can You Negotiate Rent? originally appeared on usnews.com
