If you’re like most new tenants, you may not have realised that you actually have the option to negotiate on rent before signing a lease agreement. Although you’re obligated to pay your rent on time, that doesn’t mean you can’t haggle a sweet deal with your landlord to save thousands of dollars every year. The key to success is to enter a negotiation with the right mindset and adequate preparation.
Reasons Why You Should Negotiate Rent
As a sizeable portion of real estate costs are passed down to tenants, obviously, exercising your option to negotiate on rent will help you cut costs and build up savings or an emergency fund. Negotiating also helps set the tone of your relationship with your landlord. When you do it in a respectful manner, it’s a great way to establish yourself as a good tenant who is open to communication and mindful of their obligations. Initiating a negotiation will also give you the assurance that you’re getting the best deal on the market, as you work with your landlord to find a win-win arrangement.
Timing: When You Should Do It
Among the most important factors are when you decide to negotiate on rent and the demand in your locale. If done correctly and at the right time, you’ll be much more likely to get a favourable rental rate.
Ideal times to negotiate on rent are:
- Before signing your lease contract. Ideally, you’ll want to negotiate on rent from the very beginning of your tenancy
- A couple of months in advance, before the end of your lease agreement. A number of property owners are receptive when you express your desire to negotiate on rent. This saves them time, money and effort that would’ve been spent on searching for a new tenant
- During the winter months. Ordinarily, winter is the time of year when demand for rental properties is at its lowest. Choosing to negotiate on rent during this period will put you in a much more favourable position
Negotiating Your Rent Effectively
1. Perform Your Research in Advance
Research the rental rates in the area to give you an edge when you negotiate on rent. Find out what the rates are for similar units or apartments, the vacancy rates, and the current demand. Arming yourself with this knowledge will give you the leverage you need, so you’ll be more relaxed going into the negotiation. You’ll have the assurance that your asking rate is fair, which will allow you to come from a position of strength.
2. Enquire Whether the Rate is Negotiable
After performing your due diligence as part of your preparation (before you negotiate on rent), ask the landlord if they’re open to negotiating their price. The local demand and size of the apartment or unit are important considerations. If similar units in the area are also unoccupied, property owners tend to be more open to adjusting their prices. Also, units that are managed by large companies tend to be less flexible, in comparison to owners who manage their own properties.
3. Present Your Track Record As a Good Tenant
As you negotiate on rent, discuss your history with your previous rentals to highlight the fact that you’ve always been a reliable tenant who abides by the rules. Present documentation to prove that you pay your rent on time, and haven’t caused any problems for your previous landlords. Also highlight your credit history, if you’ve established a good record. Be sure to give the landlord your references as well.
4. Know Exactly What You Want, But Be Willing to Compromise
You might not receive everything you request, when you’re looking to negotiate on rent and your lease agreement. So you’ll need to manage your expectations accordingly, and try to meet your landlord halfway to find a win-win situation. If you plan to renew your lease, also take into account the costs associated with moving and other expenses.
5. Conduct Yourself in a Professional Manner
If you think about it objectively, when you negotiate on rent, it’s like any other business deal for landlords. Thus, in order to be taken seriously, you’ll need to conduct the negotiation in a calm, respectful and professional way. Be sure to come prepared with documentation to emphasise your strengths as a good tenant, and to show the property owner how his rental property stacks up against similar properties in the area. In the spirit of give and take, offer to shoulder minor repairs, to pay several months in advance or similar attractive benefits.
6. Offer to Extend Your Lease or to End It at the Best Time for Your Landlord
Offering to extend the duration of your lease agreement can strongly influence the likelihood of success when you negotiate on rent. Having a good history as a tenant will definitely factor into the discussion as well. Also, your offering to end your lease agreement at the most desirable time for your landlord is another item he or she will take into consideration. This will usually be in the summer time, as demand is at its peak during the season.