As rent drops in many major metro areas across the country, you may want to have a conversation with your landlord about renegotiating your lease to get a better deal.
This can mean asking for lower monthly payments or offering to prepay a portion of your rent upfront, according to experts. You may even want to look around for a new place as a way to incentivize your current landlord.
“There’s a ton of changes in the rental market right now,” said Jonas Bordo, the CEO of Dwellsy, a rental listing service in the U.S. “And depending on where you are, rent could be failing dramatically, about the same as before the pandemic or even higher.”
Here are some tips experts shared to make the process easier.
Do your market research
As the saying goes, real estate is local.
While the median rent for a one-bedroom apartment fell by 0.5% nationally to $1225 in October and the 2-bedroom median decreased 0.4%, according to Zumper.com, the rent for one-bedrooms in San Francisco dropped by 20.7% during the same time. Other large metropolitan cities saw similar big declines.
It’s important to check if the same has occurred in your neighborhood.
“If you hear from a new neighbor that they’re paying lower rent for a similar place, that’s a great starting point to ask your landlord to lower rent,” Bordo said. But “be prepared for a back-and-forth negotiation. The landlord will rarely say yes immediately, so be prepared to go back and forth and find a middle ground that's a win for both of you.”
Consider moving out after your lease
Try telling your landlord that you’re looking at cheaper apartments in the area to move into after your lease, said James McGrath, co-founder of Yoreevo, a real estate brokerage firm.
“Make your initial offer and, if you're turned down, tell the landlord that's unfortunate and you're still interested, but you're going to try your luck on others nearby or in the building,” McGrath said. “They'll worry that one of those landlords will accept a lower offer and are much more likely to begrudgingly accept your offer.”
In a rental negotiation process, the last thing you want to do is to come across as desperate, according to Chris Popkin, licensed real estate agent at Nest Seekers International.
“Tell them they can either work with you, or you can continue your search among the abundance of very similar rentals on the market right now,” Popkin said. “For example, New York City currently has 16,000 rentals on the market right now. That’s quite a lot.”
Offer to prepay a portion of your lease
If you have the financial wherewithal, you could ask if you can prepay a large portion of your rent in exchange for lower monthly rent payments. Establishing trust in the very beginning can benefit both parties.
“Keeping vacancy down during the pandemic is crucial for landlords and collecting partial rent is always better than collecting no rent,” said James Watson, co-owner of Omaha Home For Cash, a property renovation company. “When negotiating a lease, a renter can offer to prepay a large portion or the entirety of the lease up front for a lesser amount.”
Read more information and tips in our Renting section