Negotiating your lease renewal can save you the hassle of making the move, switching apartments, and raising security deposits. In most instances, a lease renewal means landlords will be asking for higher rent. When you love your current place and don’t want to shell out on the expenses involved in moving, it makes sense to negotiate the rent with your landlord.
There are many ways you can negotiate lease renewal rents. With a clear strategy to negotiate rent, you can work out a win-win agreement with your landlord for your next lease period. Some simple tips to work towards a favorable lease include:
Research the Local Rental Market
For renters, it stands to reason that the more apartments that are available in your area, the more flexible your landlord is likely to be. Conversely, a tight rental market makes it easier for landlords to charge more for lease renewals. So before you go into discussions, find out the state of the local rental market.
In particular, find out what similar-sized properties are renting for in the neighborhood. Use brokerage sites, the U.S. housing index, the National Housing Fact Sheet, and sites like Craigslist to gather information.
Even without attending a negotiation skills training course, when you have all the facts to hand, you can persuade your landlord on the benefits of reducing your rent in the new lease.
Apart from researching vacancy rates and rent, determine the common clauses in lease agreements in your area. Knowing common terms and conditions can prepare you for revising your lease agreement. Some common lease terms you can haggle on are:
- Payment terms and rent due dates
- Security deposit terms
- Tenant obligations
- Limits on occupancy numbers
- Subleasing limitations
- Maintenance and repairs
- Right of entry
- Restrictions on pets
Check the Terms of Your Current Lease
Take your time going over your current lease. If you have access to lease agreements from other local landlords, compare the terms. Are there any clauses that put you at a disadvantage?
Do you qualify for special protection against discriminatory behavior? If so, check out the Fair Housing Laws. After proper and thorough research, prepare to negotiate a revision of terms for the next lease period.
Understand Your Landlord’s Position
A little empathy can go a long way in achieving a win-win rental contract. As a tenant, you want a positive relationship with your landlord that leads to a comfortable and enjoyable stay. By understanding your landlord’s concerns, you are more likely to recommend terms they might be happy to approve. Top sales negotiators aim for creating win-win agreements. When both sides are happy, there’s a greater chance of developing a mutually beneficial long-term relationship.
As you prepare to negotiate rent, consider what would make the landlord happy without infringing on your comfort. The landlord most likely wants a tenant who pays on time and treats the property with respect. At the same time, the landlord likely doesn’t want to face the uncertainty of screening new prospective tenants and an unpaid vacancy.
Use the landlord’s concern as leverage to earn concessions. However, avoid arm-twisting your landlord. You need their partnership to make your stay enjoyable.
For instance, you can ask the landlord to take care of long-due repairs and agree to the same rent for the new lease. In exchange, you can offer to pay a few days before the due date each month if an earlier pay date suits the landlord.
Also, keep in mind that family-owned properties or properties owned by smaller lease companies are more likely to hear you out than big leasing agencies.
Use Your Track Record
Are you the kind of tenant who pays on time each month? Do you keep the property clean? Do you avoid disruptive behaviors such as hosting loud parties? If you’ve been the kind of tenant every landlord yearns for, then use your track record when you negotiate rent.
Even if you’ve been late with payments in the past, you can still demonstrate an ability to improve. For instance, you can allow the landlord to run a new credit check if your financial situation has improved since your previous lease.
Maybe you completed some training and the fees were a drain on your finances in the past. Completing the course lessens your financial burden while putting you in position for a better job. You may also point out how you have been diligent in keeping the place clean and everything in perfect working order.
If the landlord values your tenancy and wants to avoid risking a potentially problematic new tenant, they are likely to review your terms. Unless there have been major complaints against you, your track record can gain you some concessions. Even when you’ve been less than perfect, most landlords would prefer revising terms than risking a prolonged vacancy.
Request for Upgrades
The aim is to obtain the maximum value for the best price. One tip is to use techniques to gain concessions from your landlord. For example, if your landlord is increasing your rent in the new lease, you could ask for significant repairs, replacements, or upgrades.
You could point out to your landlord that you would be willing to pay the asking price if they made the place better.
The time of discussing a new lease is usually also the perfect time to remind management of anything that may be wrong in the building. Examples of upgrades and repairs include:
- Replacing flickering lights
- Repairing leaking roofs
- Repainting walls
- Upgrading security installations
- Kitchen/bathroom remodeling
- Installing new appliances such as cookers or air conditioning
However, avoid bringing up a multitude of improvements, as this could make for a tense conversation. Focus on one or two improvements you feel will have the most impact on your tenancy.
Ask for a Longer-Term Lease
With some research and training, you can learn to craft new lease terms. For instance, one way to is to lock in the price with a longer lease. For example, if your current contract was for six months, consider aiming for a two-year contract.
While only a few landlords will agree to lock in a rent price for five years, they may be willing to forego increases on an 18 or 24-month lease. Often, lease agreements that go beyond one year have clauses for gradual increments.
The landlord may propose a one-off 15% increase on a six-month lease but may consider a lower increase for a longer lease. For example, you may convince your landlord to agree to a 5% annual increase instead. Some benefits of switching to a long-term lease include:
- Stability: You avoid the risk of being forced out in case the building’s management changes.
- Predictability: You know how much your rent will be from year to year, regardless of the prevailing market conditions.
- Concessions: Landlords are more willing to allow concessions for long-term tenants. For instance, you may bargain for some free months, lower monthly charges, or better installations.
Offer Upfront Payments
Paying rent for more of the lease period can overcome some rent-reduction objections the landlord may have. Many landlords will be wary of lowering their rent charges if you’ve had problems paying in the past. Paying more months of your lease rental in advance could increase the chances of earning discounts and lower rent.
You may also bargain for a reduction in your security deposit if you pay all or part of your rent in advance. Although security deposits primarily cover damage, the deposit also serves as insurance for non-payment. By paying rent in advance, there’s no possibility of you defaulting.
On the other hand, offering to pay a higher security deposit may encourage the landlord to charge lower rent.
It’s not always possible to come up with a full year’s rent for a residential lease. If you’re having trouble raising the total rent for the whole lease term, try offering as significant an advance payment as you can. Even three months could still work in your favor when revisiting lease terms.
Make Concessions You Can Live With
Negotiations typically involve some give and take. With training, you can hone your abilities for making concessions in return for equal value. You may want to make some concessions to persuade your landlord to agree to some of your terms. Yet, there are concessions you might not want to make.
For example, if you’re thinking about getting a pet, you might feel strongly about living in a pet-restricted apartment.
The point is, you want to make concessions you won’t regret later. At the same time, your landlord may lower rent and ease restrictions if, in some way, you make their life easier.
Let’s say you’re handy with tools. You may offer to assist with minor repairs in exchange for a lower rent. If you’re home more than your neighbors, you may offer to improve security by heading a neighborhood watch group.
You want to make concessions that are easy to implement and don’t cause many inconveniences. Since its give and take, ensure the landlord meets each concession with a rent reduction or other concession of similar value.
Negotiate Rent for Your Lease Renewal
Thorough research goes a long way to preparing before you negotiate the rent. By comparing local market rates and terms, you will be in a better position to gain concessions from your landlord. For a win-win agreement, consider not only your needs but the landlord’s needs too. What are the landlord’s fears and pain points? How can you solve or reduce the landlord’s risks?
If you’ve been a dream tenant, your track record can persuade the landlord to ease up on some restrictions or lower some charges. You may also request installation upgrades or much-needed replacements. A kitchen remodel or a new paint job can make the higher rent worth paying.
You may also lock in an attractive rental rate by signing up for a more extended lease period. However, when you negotiate rent, only agree to concessions you can live with. Otherwise, you may be in for an expensive or uncomfortable tenancy lasting the whole lease period.
