If a homeowner wants to lower his house payment, he can always consider refinancing his mortgage. But if you’re a tenant, there’s no refinance option. Your only option is to negotiate for a lower monthly rent payment. This will be true whether you already rent your home, or if you’re looking to move into a new rental.
There are ways to negotiate lower rent, and which you choose will depend on your own circumstances and abilities, as well as the state of the local rental market.
Negotiate a rent reduction
It may be possible to negotiate a lower rent payment than you are currently paying, or than the landlord is asking for a new unit, but there are some steps to take before you do.
Determine if you’re in a renter’s market or not. This single step will determine how much success you’re likely to have in your negotiations. A renter’s market is one in which there are more rental units available than potential tenants, which is to say that it’s the renters, and not landlords, who control the market. In a renter’s market, you’ll be able to negotiate more boldly. In tighter markets, you may have no success at all.
How do you know if it’s a renter’s market? You can check with real estate agents and rental agencies in the area, but they may not tell you it is since it will hurt their business. The better course is to look for telltale signs, like a large number of “for rent/for lease” signs, a large number of rental ads in the local newspaper, or landlords offering incentives like free rent, no security deposit, or TV’s. Landlords offer these as incentives during renter’s markets.
Check comparable rentals in the immediate area. Search rents in the area of units or homes comparable to the one you’re looking to rent. If the rents on other properties are lower than the one you want (or the one you’re living in now) show them to the landlord and use them as support for a lower monthly rent.
Sign a longer lease
If you’re just about to rent a house or apartment, or if you’re negotiating a renewal, one way you can keep your rent down is by signing a longer lease.
A longer lease may help you get a lower rent because the longer term benefits the landlord. One of the major costs for a landlord is tenant turnover. Every time a rental unit changes tenants, the property will have to be cleaned and painted at a minimum. This will cost the landlord, but if he can keep a tenant in the property for several years, he’ll save the cost of cleaning and painting every year.
Sometimes a succession of tenants causes the property to wear out more quickly, and that leaves the landlord with large repair bills, such as replacing carpeting or kitchen appliances. Landlords prefer to avoid those expenses, or at least to delay them until a tenant leaves. By negotiating a two or three year lease, your landlord may agree to a lower rent.
(Disclaimer: if you’re an existing tenant looking to lower your rent payment, this strategy will only work if you have a history of paying your rent on time, otherwise the landlord will want you out as soon as possible!)
Perform maintenance services
Another way you can lower your rent is by performing certain maintenance chores on the property. This is possible in single family homes and small apartment buildings, but not typically in larger apartment complexes.
You can perform routine maintenance such as lawn care, snow removal and small repairs. You can also perform larger tasks, such as painting or more significant repairs. A landlord may agree to services in lieu of rent, which will give you great flexibility in negotiating.
Become the building manager
A way to really save on rent it by being the building manager in a small apartment building. My brother in law did this many years ago, and got a $500 a month rent reduction. He had to perform minor repairs on the building and on other apartments, and also did repainting when tenants moved out. He managed to save $6,000 a year in rent for the four years that he lived in the building. It’s not for everyone, but if you have an aptitude for maintenance and repair work, it can save you a lot of money on rent.
If all else fails, take in a roommate
This may not be the most desirable arrangement, but it’s a way to virtually cut your rent in half. Not everyone can do this of course, but if you’re a single tenant and the property you rent has two or more bedrooms, taking in a rommate would be a quick (though not necessarily easy) way to cut your rent expense.
Some landlords may raise the rent in response to an additional occupant, but the increase should be far less than the 50% of the rent that the roommate will be paying.
Look carefully at the rental market in your area, be prepared to sign a longer lease, or to use some “sweat equity” and you have an excellent chance of getting a lower rent, maybe even much lower!
Have you ever used any of these techniques to get a lower rent?
Kevin Mercadante is professional personal finance blogger, and the owner of his own personal finance blog, OutOfYourRut.com. He has backgrounds in both accounting and the mortgage industry. He lives in Atlanta with his wife and two teenage kids and can be followed on Twitter at @OutOfYourRut.