Did you know you can negotiate rent? I didn’t until about a year ago when Mrs. Freaky Frugal and I sold our home in the burbs so we could move to downtown Philly. We were thrilled – we’ve always wanted to live downtown since we moved to Philly long ago. City wage taxes and having children got in the way.
We hadn’t rented in 30 years and didn’t know the downtown rental market. As we put our house up for sale, I started eyeballing Zillow and Craigslist to get a feel for rents. We decided on a budget of no more than $1,500 for a 2 bedroom, 1.5 bathroom rental. It had to have a dishwasher, garbage disposal, and washer/dryer. Outdoor space and parking would be nice but not a must. A nice place.
We decided to visit at least five rentals to get a feel for price and quality. Some were row homes and others were apartments. At each rental, I asked the same question: “Is rent negotiable?” I was sometimes told yes and sometimes no.
Onetime I was told “maybe” by a broker. MAYBE? Do I have to negotiate on whether we can negotiate? We made a fast exit from that place. I hate dealing with a broker instead of the owner. Even an employee of the owner is better.
The sixth place we saw had everything we wanted except outdoor space. It even had 2 full baths instead of just 1.5 baths. It was also brand-new construction and over budget at $1,600. One weird thing about it was that it had two floors with the lower floor partially underground. But the lower floor had large window wells that allowed enough light to grow plants on the window sill. In our old house we had a family room that was exactly the same and we felt comfortable spending lots of time there. So not a problem for us.
Another weird thing was that the entire 12-unit apartment building had been completed in August 2015, but it still had two of the partially underground units available to rent in March 2016. Hmmm – this seemed like an excellent opportunity to negotiate because the landlord should be desperate for some rental income.
I called the number for the landlord and talked to Mary:
Me: Hi! We’re the people that just looked at the apartment and we really like it. I was wondering if rent is negotiable.
Mary: I have to talk to Joe the owner, but what do ya have in mind?
Me: I was thinking $1,500 per month with one of the covered parking spaces.
Mary: If you want to do that, Joe is probably going to want a two-year lease with the lease starting no later than April 1st.
We wanted a two year lease anyway to lock in the price, but we’d rather have the lease start April 15th or even a little later because the close on our old house wasn’t until the end of April. But we’re willing to eat the additional two weeks rent if we have to.
Me: OK, I’m willing to do that.
Mary called back about thirty minutes later:
Mary: OK, Joe is willing to do $1500 per month with a two year lease starting April 1st.
Me: Great! I’ll take that but I also have another option for Joe about the start date. It’s just an option.
Me: Tell Joe I’m willing to pay six months rent in advance if he’ll move the start date to April 15th.
This was a winning proposition for us. We’d save $750 for one-half month’s rent. This would be offset by about a $45 loss of 6 month’s interest on $9,000 in our 1% per year savings account*. In other words, this would save us over $700. Cha-ching!
It is not such a great deal for Joe. But hey, maybe he’s cash hungry or just willing to be nice to create a good relationship. You never know until you try.
And sure enough enough Mary called back in a few minutes:
Mary: Joe accepts your offer. Please make the payment as soon as the lease is signed.
Me: No problem!
So just like that we now live in a brand-new apartment at the rent we wanted!
The $100 per month savings we negotiated may not seem like a ton of money but it’s $2,400 over 2 years. And as every Freaky Frugal person knows, even small monthly savings can have a big impact on long-term wealth.
Tips for negotiating rent
I learned some useful lessons that might help you negotiate rent:
- Use Rent Jungle to see if average rental prices have been trending up or down. If they’ve been trending down, use this as ammunition for negotiating.
- Find a rental that has been empty for awhile. The longer it’s been empty, the more desperate the landlord will be to rent.
- Check if the property is listed on Zillow and see if there’s a rental price history. Look for the last rent and whether the new rent has increased or decreased. If you see the rent was recently reduced, that’s a good sign the landlord will negotiate further.
- Be open to a longer term lease. This locks in your rent for longer periods with no increases and gives you something to negotiate with.
- Be open to paying months of rent in advance if you have the cash. If I were a landlord, I’d get a warm and fuzzy feeling that the tenant is very credit worthy. This is something else to negotiate with.
- Try to find two or more acceptable rentals at the same time and play one off against the other. The person who can walk away is always in the best position to negotiate. We didn’t do this but I plan on trying it when we come up for renewal.
Thanks for reading! Have you ever tried negotiating rent? What happened?
*It is not even a $45 loss because we would have paid rent at the beginning of each month during the 6 months. Bonus points for calculating the exact loss!