Here’s how to negotiate lower rent as prices soar after their COVID lull
Cheap rent, a welcome byproduct of a pandemic that led many to flee U.S. cities, is now a thing of the past.
Nationwide, rents are now 11% higher than they were last year. Last month, for example, the median rent for a Manhattan apartment was up 24% from a year ago to $3,700, according to real estate appraiser Miller Samuel.
It’s a big turnaround from during the pandemic, when rent plummeted. In 2020, it fell as much as 20% in New York and 17% in Maine compared to 2019, among others.
“A lot of current renters that got these sweetheart pandemic deals have leases coming up, and they are seeing tremendous increases in their rents,” Matthew Bizzarro, founder of The Bizzarro Agency, a real estate brokerage in New York City, told Fortune. “In short, those COVID deals are simply gone.”
If your lease is expiring, and you just got word that your landlord is raising your rent beyond what you can afford, you may be wondering about your options. Here’s what experts say you can do to negotiate a lower amount.
The first thing to remember is that there is always wiggle room, experts say.
“What every renter needs to understand is that they can and they should attempt to negotiate,” Bizzarro said. “You should always enter any conversations about lease renewals as a negotiation.”
In most situations, landlords are willing to settle for lower than the asking price, especially if the tenant has typically paid rent on time and not had problems in the building, Bizzarro said.
Experts say you should come prepared to the negotiating table with counter offers. If you’ve paid rent on time and made improvements to your living space, it’s important to bring it up when asking for reduced rent.
“The strongest thing any renter can do is leverage their own rental experience,” Bizzarro said. “A good tenant that pays on time and makes the building a better place is a tenant that landlords may not want to risk losing.”
Additionally, there are several tools you can use to your advantage that may incentivize a landlord to accept lower rent. For example, landlords may be more open if you’re able to move into a new space within a short amount of time, or if you’re willing to accept a longer lease.
“The quicker you’re able to move in, the better the deal you’ll likely be able to negotiate,” said Teddy Sutker, a real estate broker at Peak Realty Chicago. “And you can also offer to take on a longer lease, because landlords tend to give better deals to longer leases.”
Use your leverage
The last thing a landlord wants is to have a vacant apartment, experts say, which gives renters the most negotiating power they have.
“Any time a landlord has a vacancy is a time they are not making any money on that property,” Sutker said. “Potential vacancy is the key point of leverage any renter has, and they should absolutely use that to their advantage.”
Landlords must pay to clean, repair, and show vacant apartments to potential new renters. Reminding landlords of that could help keep rent down in the renewal process, Sutker said.
“From the landlord’s perspective, the less work they have to do, the better,” Sutker said. “More often than not, if you have a good relationship with your landlord, they’d rather keep you there than take the chance of having a vacancy.”
He added: “There’s always room to meet in the middle. It’s about understanding where you have room to advocate for the price you want.”
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