Many residential leasing companies offer a lease agreement for a specified period of time. After the expiration of the original lease term, you might anticipate changes in rental rates. Fortunately, it is possible to satisfy both parties, as long as you have some room to negotiate. Landlords usually want renters to stay longer, although they may want more money and to not have to find a new tenant. When the landlord asks for an increase in rent, suggest what you can afford and what’s fair. Here are some tips on negotiation the renewal of your lease agreement.
Start negotiations with the landlord. A good opener is, ‘I received the lease renewal, I’d love to stay in the apartment but the suggested increase is more than I can comfortably afford. I’d like to discuss terms and find something we’re both happy with.’ Depending on the accessibility of your landlord you may need to call or email to schedule a good time to discuss the situation.
You should know beforehand what your apartment is worth, research similar properties in the neighborhood. Learn something about the market that works in your favor. Find out if the values of real estate went up or down in your neighborhood, and how that compares to the city or national average. You can mention that your apartment isn’t worth what the landlord is asking, or maybe you could easily find a similar place but cheaper. Another thing to know more about is vacancy rates – an increasing vacancy rate in the area means a major vulnerability to apartment owners. Adversely, a decrease in vacancy creates value and increases rent.
Show your landlord that you are a great tenant. Note that you haven’t bounced a check, disturbed the neighbors, broke a window or snuck a pet in, missed any rental payments or even paid late. However, if you don’t actually meet these standards, skip this in the negotiation.
Most renters want to extend their lease. Often, large leasing companies don’t offer multi-year leases because vacancy and replacing tenants isn’t a big threat for them. But for smaller apartment owners, guaranteeing that you’ll stick with them might be worth more than increased rent.
Offering money up-front may be appealing to some landlords if you want to extend the lease. This tactic may not help if your landlord is a large company, but for small apartment owners, several hundred dollars is worth more than a grand spread out over a year. Offer to pay your first 3 months up-front in exchange for a lower rent increase.
Most importantly, be sensible. Weigh the actual costs versus the alternative costs. Although $25-$50 increase per month may seem like a lot if you’re on a tight budget, the up-front costs of moving far outweigh the monthly increase. Think about the physical act of moving, new security deposit, transfer of utilities, etc. The increased rate the landlord is requesting may pale in comparison.