Many things in life are negotiable. Rent is one of them. Here are a few tips on negotiating rent.
- Understand the market. If your rental market is really soft, then the landlord may be having a hard time finding tenants, especially if their property is in a sub-optimal location or the property itself is not as desirable as others. So ask for a lower rental amount. This will not work if someone else with equally good credit is willing to pay the asking amount, so you must understand your market, first.
- Understand the landlords mindset. What the landlord wants is the least amount of interruption in the rental stream and maintenance. This means that they want the most financially capable and responsible people in there. They are going to ask for the amount that they think someone will accept. Your competition is not the landlord…it is other prospective tenants.
- Landlords will prefer families above all others. Then single people with great professions, and last of all, college students. So hype up your family and professional career to give you an edge.
- Landlords want stability. The least interruption in the rental stream like mentioned earlier is money in their pockets. If the place is unrented for just one month, that’s a 8.3% drop in the yearly income, plus the cost of refreshing the place (turnover cost). If you come in and offer a 2 year lease in return for a 5% drop in rent, or a 3 year lease for a 7% drop in rent, they just might do it!
- Keep your options open. Have multiple places that you are considering, so you can compare value, and you can play a little hardball and “walk away” from the negotiations by saying, “I need a couple days to consider this and my other options.” The landlord may fear losing you, and agree to lower rent.
- Do your best to read the landlord. You don’t know what other tenants you are competing with. They will go with the people willing to pay the most, but landlords always think in terms of maximizing their return. If another tenant is willing to pay asking-rent for 1 year and you want a 15% discount when the turnover cost is just 10% for the landlord, the landlord will go with the other tenant.