Adventures in negotiating rent

Did you know you can negotiate rent? I didn’t until about a year ago when Mrs. FF and I sold our home in the burbs so we could downsize and 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.

Really Stupid Comic #2

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.
Mary: Ohhhkaay?
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!

This is our fancy pants Kitchen!

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!

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16 comments

  1. Wow it looks like you scored a great deal. My wife and I negotiated a rental for my sister in law, who has special needs, and got a great deal on it because the landlord was desperate. Definitely turned out in our favor and I would have never thought they’d be negotiable. Sometimes all you have to do is ask 🙂

    1. Nice work! And it’s really great you were able to help your special-needs sister-in-law.

      I was browsing at an art fair today and looking at some of the high price tags. It dawned on me that I could probably negotiate price with artists as well. Not really interested, but it made me wonder what other non-obvious things I could negotiate. As you say, you can always ask.

  2. That sounds like a smooth negotiation. We have tried to negotiate rent in the past but have never had any luck. However, I never offered to pay six months upfront or sign a two year lease. Nice work.

    1. Hmmm…it’s funny you bring that up. As soon as I published the article, a friend of my who owns a rental property said that he wanted an article on negotiating rent for the landlord not the tenant. I told him that I only write what I actually know about. Maybe you can write that article? Or maybe you already have?

  3. Yep, did some huge haggling back in the day with rent! Apartments in my HCOL area are expensive. $1800-2000 for a 1 Bed 1 Bath. So my wife and I rented a room in a house from a friend for a few years in order to save for a downpayment on a house. The room was going for $900, but we haggled it down to $650. Felt bad, so later upped it to $700. But in my defense, in exchange, I helped her fill the other rooms for a few years. Which she really appreciated. So it was a mutually beneficial scenario. So now we have our own place. Not huge, 1500 sq ft, bought 4 years ago for $413K. Now it’s roughly $550K, so it’s jumped quite a bit.

    1. Thanks for sharing!!

      I like the fact that you were able to help your friend in exchange for the lowered rent. Makes a lot of sense.

      We try to be an ideal tenant by watching out for the shared areas of the property and taking good care of our apartment. I hope our landlord will take this into account when we come up for our lease renewal. We’ll see.

      Congrats on the nice appreciation of your house!

  4. While I haven’t fully negotiated rent, I was able to negotiate away an increase in rent so that my expenses did not increase this year! I used some data from some surrounding rentals and the fact that I’ve never been late with a payment and have not given any issues, and surprisingly my landlord didn’t really put up a fight. Basically said “you’re right” and we drew up the lease the same exact way for this year.

    That was a solid negotiation on your part, you were able to get the price you wanted and obviously the cash persuaded the owner to agree!

    1. Thanks for sharing and that’s some excellent negotiating! What sort of data did you show the landlord? And where did you get the data?

      …obviously the cash persuaded the owner to agree!

      I was surprised the landlord bit on my offer. I wouldn’t have.

      The great thing about being Freaky Frugal is you eventually have extra cash to use for generating more cash and savings. It’s like another lever to pull for any negotiation.

      1. Basically we looked up a few other apartments for rent in our area (Craigslist, Apartments.com, etc) and even in the same complex, or ones with additional amenities. It wasn’t anything extensive but it gave us a few price points to negotiate with.

        I probably wouldn’t have taken the offer either, but I’d imagine some landlords like the peace of mind of cash up front.

  5. Magnificent kitchen! (Sorry I’m a bit of a deco freak ha!)

    Well thanks to a cash strapped Joe, you guys got a great deal!

    If I was a long-term landlord, I would probably forgo some money guaranteed upfront just to avoid the potential trouble later on with broke tenants. Win-win!

    1. Mrs. Freaky Frugal loves to cook and I love to eat. It’s a perfect relationship! Both of us loved the kitchen as soon as we saw it. She called it a cook’s kitchen.

      Plus the two bathrooms were really HGTV-looking. It’s easy to be distracted by shiny objects. And we really liked the shiny objects in this apartment. 🙂

  6. Now that’s a great deal. the key to me was that you were willing to extend the time of the lease. Lower rates for a longer term commitment, a win for both of you if you ask me. Now he doesn’t have to go through the negotiating process again in twelve months. Very savvy move as well by the way by saving an extra half month rent – That’s not a move I would have considered but it delivered some very fruitful results.

    Congrats on scoring the deal and getting a place that checked all your boxes.

    Bert

    1. Thanks Dividend Diplomats!

      After he accepted the $1,500 per month without countering, I wondered whether I could’ve gone lower. Say $1,475. But I was worried that going so far below his $1,600 asking price would be insulting. I guess I’ll never now.

      Anyway it was a fun adventure and great learning experience!

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