Should you try to reduce your rent?
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For Rent Sign Lately it seems that rent prices have been dropping in many areas of the country. Here in San Mateo some residential apartments are dropping prices as much as 20%. This seemed a bit unbelievable until I looked on Craigslist and found that a specific apartment my husband and I looked at around two years ago actually dropped its price by $300 a month from $1699 to $1399 a month. With our lease expiring soon, I wonder if we should move or try to negotiate a lower rent.
My husband and I both do not like moving because it takes a lot of time to look for a new place. There is also the cost of renting transportation and the general headache of carrying everything. However, if the discounts are large enough it might be worth the cost. Although occupancy rates are still quite high in San Mateo county I am seeing many similar nearby units for rent on Craigslist for anywhere from $150 to $300 less than our condo. It definitely seems that we are paying too much for what we are getting. If we are able to sign a new lease for $300 less a month for a comparable rental then it might be worth the hassle of moving.
Another option is to just ask our landlord for a discount. A few months ago a Wall Street Journal blog post showed how a simple letter detailing the declining of the rental market in Manhattan allowed the author to reduce her rent by $300 a month. I think this would probably work well for any good renter in a declining rental market since it would hurt the landlord quite a bit to leave an unit empty for a couple months. For example, if my landlord gave us a discount of $100 a month then he would be losing $1200 in a year, but he would lose $1700 a month if we moved out.
I think the important thing is to craft a letter that incorporates evidence that the rental market is declining. It also helps your case if you are consistent on your rent payments. This probably would not work in areas where rental markets are still quite active, but I think it is still possible to negotiate a lower rental rate for a longer term lease. In general month to month leases are the most expensive, and leases that are a year or longer could provide a discount.
Anyway, right now my husband and I decided to just write a letter to our landlord requesting a discount. I will probably enclose some of the cheaper listings I have found recently. I do not expect that I would get a $300 a month discount, but I would definitely be happy with a discount of $50 to $150 a month. That discount would add up handsomely over a yearly lease. The largest expense in most of our lives is housing, so I think it makes sense to try to reduce that cost if possible.
Have any of you tried to ask for a rent reduction this year ? Have you moved recently due to large rent drops in your area? Feel free to share!
Update: I got $75 off per month on my rent after simply asking my landlord. We signed a new 1 year lease, and this would save us $900 over the year.
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If you are a good renter I think it's fine to ask for a rent reduction. We just renegotiated a lower rent with our renter figuring that if we had to relist our place we'd have to pay a month's rent to a realtor to find another renter (assuming people are working with a realtor).
My son moved recently with his wife and baby to a larger newer apartment for the same rent as their old apartment. He didn't ask for a reduction. He rented a small moving van for a few hours and family and friends showed up to help him move quickly. He was able to return the van the same afternoon and avoided any extra charges.
I would ask for a reduction or move to a better or cheaper place.
I'd give it a go. Here's my story: I recently bought a house in the bay area and watched with interest as my landlord was forced to rent my old place for almost 15% LESS than I was paying. I chuckled each time I saw a price drop on craigslist. In the end, the rent had to be competitive relative to other similar places on craigs.
My next door neighbor negotiated a $400 price reduction. (Though, he told me it wasn't easy to do. Lots o' haggling.)
I tried this in San Jose, CA and they wouldn't budge. Yet the new people coming in got the lower rent. With prices down significantly, the breakeven for a move, even a luxury one where you do little of the work yourself is at most 6 months.
Here in Pittsburgh, houses haven't really taken a huge hit and the rental market seems to be doing ok, though prices seem to be generally down.
We're paying $770/mo for a 2-bedroom apartment. They were raising it by $20. I asked for a deal. They said no.
So we decided to look at our options. We're now moving across town (we're thinking about buying there maybe, so it'll be worth it to see if we like the area and commute).
Our new rent will be $745. It's also a 2-br but it's about 100 square feet bigger, has 2 full baths to our 1.5 baths now, and has a W/D in the unit.
If our current complex cut us a deal, they wouldn't miss out on a few hundred bucks.
My neighbor moved out in April and it's had some showings but it's still vacant.
They shoulda made a deal with me.
In today's economic climate landlords are always looking for ways to get renters to stay. With prices in free fall in many areas including my own state of California, it's common for existing renters to be paying $100's more than currently advertised rates.
So why do landlords turn a blind eye to existing residents who they know and like and then turn around and offer discounts to new residents who they don't know? Simple...if they offer disounts to existing renters they run the risk of having a viral mess on their hands as the news travels throughout the community. This could potentially be devastating to their bottom line as every renter negotiated for lower rent.
What can you do about it? Also simple...ask anyway. Give your landlord all the reasons why they don't want to lose you, show them that you know what competing apartments are renting for and if you know what they are offering for the same unit and it's less rent then let them know. If that fails you can offer to move into another apartment for the advertised special. If you are willing to move, most landlords will feel compelled to offer you the current advertised rates. This of course is a win win since you get to stay in the complex you like, get a newer unit often with upgrades and a lower price.
Of course if you really want to stay put, promise to keep the whole affair to yourself and keep your promise. One peep and you run the risk of ruining it for your fellow renters. After all, if they do their homework, they may be able to negotiate a sweet deal with the landlord too.
Good luck and please let me know how it goes.
Apartment Sage
I have to concur with the "just ask" statement. Yesterday I was able to lower my rent by 100 a month just by asking, the apartment manager was glad to help us out and she offered an even better deal if we were to sign another lease. This last offer piqued my interest and my wife and I went back to talk later, signed a new lease and we got the rent further reduced and even got a discount on our parking. Non of this would have happened without a simple question, and being a good renter didn't hurt either.
Last year my rent went UP by $10. I thought that was interesting. I also found out that people who moved in are paying less for apartments then I am. I do belong to a large group of apartments so again if they give me a break, they will have to give everyone a break. Which comes to over 1,000 apartments. I doubt they will give me a break, but we will see in December.
I asked the landlord in January if he would not increase my rent the $40 he informed me that the 2009 rent would increase. To my surprise, he agreed!
So it's not less than 2008, but it is the same!
Hi,
I actually just negotiated my rent. My boyfriend and I live in a very nice 3bed, 2.5 bath for $2200/month in South San Francisco (San Mateo county.) We asked our landlord and got 10% off or $220/mo discount. New rent is $1980.
My single friend who lives in a luxury 2bedroom apartment in SF also negotiated and got a $500 reduction from $4000/mo to $3500/mo.
I wrote an email to my landlord saying how much my boyfriend and I love the place and what an awesome landlord he is. But the rental market has declined as we just wanted to pay market price. I told him my intention was not to move but to pay a lowered rent. I also researched craigslist postings and sent him a bunch of similar places for less.
Good luck with yours.
As a landlord I can tell you I would MUCH rather lower somebody's rent than have to go through the hassle of finding another tenant and putting money into the unit for new paint, carpet, and whatever else is needed. But I am my own "boss" and if you're dealing with a big rental company the local managers might not have the authority to negotiate that kind of thing.
I am trying to rent a unit right now, and a lady who was supposed to come by to see it called to cancel. She had wanted to move to save money because she didn't need an extra bedroom anymore, but she said she "worked something out" with her current landlord to pay less for the next three months rather than move.
Hi,
We live close by in Santa Clara, and I noticed pretty much the same thing about the rents 2 months ago. I did write a letter to my landlord, asking him to reduce the rents. He agreed to it but asked us to sign a new lease for an year ( which was reasonable IMO), since our older lease had expired and we were on a month to month lease. With a baby on the way, we wanted to move to a bigger apartment anyway, so we declined the reduced rent and will be moving out soon. However, my experience says, "It never hurts to ask". Who wouldn't want to shave a neat $200 from their monthly budget with a 1 hour of work. Thats a lot of money ( for us at least) to leave on the table.
As a lanlord, I'm shocked when I read your comment about a "month to month lease", because here in Spain, we are forced to make 5-year contracts. And we cannot claim eviction, if they don't pay the rent.
Even though, people is not willing to pay a 600 EUR (835 USD) rent, because average salary is around 1000 EUR (1400 USD) for most people.
We're doomed.
It really can't hurt to ask for a discount. Even in good economic times. If you're a good renter and pay your rent all the time and don't cause problems then as a landlord I'd be open to a cut in the rent.
Don't expect all markets to see decreasing rents. I think in my market rents are only down maybe 1%. Some markets will see rent go up. It really depends on the local markets.
I'm trying very hard right now to readjust my rent in Mountain View.
The landlord wants to *increase* the rent of my 2-bedroom by $100. The same apartments in the same complex are going for $500 less per month. I'm not joking. It's advertised right on their web site. They're simply refusing to lower my rent, but are perfectly fine with me moving to another unit for a lower rent.
It's quite frustrating because moving is annoying. Am I going to have to do this every time my lease comes around? I kind of want to just move to another complex if they're going to be this difficult about it.
To add to my previous post, my apartment complex in Mountain View is managed by a country-wide corporation, and when I talked to the apartment manager, it seemed as if she was unable to lower the rent without talking to corporate first (or maybe she is just unwilling to do it for me).
Also, although they will automatically transfer my lease to a month-to-month, there's an extra $300 per month they will charge for it.
My apartment is on the top floor of the complex (it's pretty much the tallest building in the area), and they claimed that the rent (with the increase) they offered is "market price" because of that. Does a top floor apartment really fetch $300-$400 more? I doubt it.
Oh month to month leases are pretty common here. They're more expensive than the longer leases, though. 5 year contracts without the right of eviction sounds horrible. How do landlords do business there?
If I were you, I'd rather try to negotiate the landlord first for a lower rental cost. Afterwards, whatever the landlords decisions that is the time for you to decide whether to stay or to transfer.