Can You Negotiate Rent?
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Loading... - Brandon Stevens
- 01 Apr 2022
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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.
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. Read More…
