The idea of “negotiating” isn’t something the average person is accustomed to or comfortable with. Typically, the average person doesn’t often negotiate. Whether you’re at a grocery store, a thrift shop, or a drug store, you usually see a price and pay it. However, when it comes to larger deals and transactions like signing a lease agreement, negotiation isn’t just acceptable – it’s often expected.
You might react negatively to the thought of having to negotiate with someone you hardly know, especially someone you might have to interact with regularly over the course of a few years like a landlord. But business is business, and finding a deal that works for both parties is extremely important.
Here are 4 tips for negotiating rent as a tenant that could help you save a few dollars and reach an agreement that’s advantageous for you and your landlord.
Research the Rental Market
Before you begin negotiating over a property you’re interested in, it’s important to be well-informed about the current rental market and the property itself. Understanding the landscape will help you understand how much leverage you have in a negotiation, and how much room there is to negotiate.
Learning about the rental market in your city or region can often be as simple as a quick Google search. There are many organizations, blogs, and sometimes government agencies that release information publicly that could be helpful.
The most helpful figure you would want to know is the rental price per square footage. The more specific the better. If you’re looking to rent a condo, for example, understanding the price per square footage of other units in the unit would give you a crystal-clear understanding of the market value of your property. If you’re looking to rent a house, finding rental values on the same street or even neighborhood could help a lot as well. If all else fails, knowing the rental price per square footage of your city or region will also be useful information to you.
If you’re unable to find these data points, don’t fret. Another way of assessing the market value of your desired property is simply searching up listings of similar properties in similar areas and seeing what landlords are asking for those properties. Knowing what landlords expect in the neighborhood can give you more knowledge that will help you talk down your price.
Another crucial component is researching the property itself. A quick browse through public government files, previous listings online, or even social media can tell you a lot about not just the property – but the landlord as well. Information like when the property was built, when it was bought, and how many tenants have been in and out can be very revealing.
With this information, you can understand why the landlord is looking to rent this property, and how quickly they’re looking to rent it. For example, if you see that the rental listing has been up for a considerable amount of time, they might be more willing to negotiate just to get it off of their hands. The longer it’s on the market, the longer they’re going without making money.
Sell Yourself As A Great Tenant
Some landlords will go to great lengths to market their properties. They’ll invest in staging, posting listings, and other marketing tactics to ensure their property is as enticing as possible. While it may seem counterintuitive, tenants should seek to market themselves similarly.
For the most part, landlords aren’t just looking for the person willing to pay the highest price. This isn’t a one-off transaction, it’s an ongoing partnership. That’s why landlords are much more attracted to tenants they feel are good, reliable people who are very likely to pay their rent on time. Painting yourself and others who will be living you as trustworthy will offer you leverage when it comes time to negotiate. It may also help you stand out amongst other potential tenants who may be putting in similar offers to you.
So how do you market yourself? First off, it always helps to build a narrative around yourself. People love stories and will often respond more positively to great storytelling. For example, when initially reaching out, don’t just say you’re a student. Be more specific. Say you’re a master’s student studying psychology with hopes of achieving a PhD and eventually becoming a clinical psychologist (for example). Part of this storytelling is also about instilling trustworthiness and transparency. Let the landlord know about you, why you’re moving, and what you’re looking for in a rental property.
Secondly, ensure your communications with the landlord are professional and pristine, without sounding too robotic. Small things like grammar and punctuation can go a long way in instilling a feeling of reliability. However, you also want to make sure your personality is coming through.
Finally, be extremely meticulous at every step of the process. Ensure documentation isn’t just properly formatted and filled out, but also that it’s submitted on time. Being responsive and reliable is a great trait for a tenant, so ensure that you’re painting yourself in that light early on.
Marketing yourself may seem over and above what’s necessary, but down the road, your level of quality as a tenant can be leveraged as a bargaining chip.
Negotiate Your Rent by Adding Value to the Deal
Once you’ve seen the property, learned all there is to learn about it, and have been in contact with either a real estate agent or the landlord, it’s time to get down to brass tax. Don’t be scared. Many landlords own other properties and have likely been down this road before. It’s nothing personal, it’s just business.
Quite often, the negotiation won’t be quite as simple as putting in your ideal rental offer. There will likely be some back and forth and slight rejigging on the terms until you finally reach an agreement. While the most common point of negotiation is the rental price, however there are many other elements of a rental agreement that could be up for negotiation. These could include things like the possession date, and who pays for what utilities. Using these other elements could help you negotiate on price.
For example, if the landlord is hesitant to meet you at your desired rent price, and the property is currently vacant, try sweetening the deal with a possession date that’s sooner than what was listed. The quicker they can start collecting rent, they quicker they can stop losing money on their property. Or, if the original agreement has the landlord paying utilities, you can offer to pay utilities so long as the rental price remains low. These two points of negotiation are just examples; however, the point is to use other elements of the lease agreement to negotiate on the element that you wish to negotiate on.
Another way to add value to your proposed deal is to offer a few months of rent upfront. If possible, offering a few months upfront is extremely valuable to landlords who likely have taken out a loan to purchase the property in the first place. As well, if the landlord is looking for tenants for other vacant units, you can also propose a referral deal where you bring the landlord leads. These are just some of the tokens you can use to negotiate for lower rent or other terms.
Learn How to Negotiate
You’ve done your homework by marketing yourself, learning about the property, and learning about the rental market. By now, you should have a sense of not only what you want, but what is fair. Before going into a negotiation, ensure that you have this exactly spelled out. Not knowing what you want can make you aimless and sloppy mid-negotiation.
According to Brotherly Love Real Estate, “Next, plan to go into the negotiation with an offer that’s better than your desired outcome. If the landlord takes the deal, great. If not, they’ll come back with an offer that hopefully meets in the middle and more closely matches what you were hoping for. Not leaving wiggle room and offering exactly what you want off the bat will more likely than not leave you with an outcome you don’t want.
Another crucial element to negotiating is doing it in person. It’s much harder to say no to someone while looking them in the eye, and if you have a proper game plan, it creates more urgency to make an agreement. If you can’t negotiate in person for whatever reason, try to do it over video chat, or over the phone. Having a conversation rather than an email or texting thread will help you steer the negotiation in your favor.
As awkward and uncomfortable as it might be, negotiating is just part of doing business. Negotiating could save you hundreds or sometimes thousands of dollars a year and could give you access to amenities or other perks you didn’t have access to before. As long as you’re respectful, responsive, and open to conversation, you should have no problem negotiating the terms of your lease.