Every cent counts when you’re saving for a deposit on your first home – and the ability to negotiate a competitive rent during this period can make a significant contribution to your financial progress.
You should not underestimate your negotiating power when either renewing an existing lease or seeking a new rental.
Zillow says that in our biggest 50 cities, there is an increasingly lower demand for rental properties. Its research suggests 40% of rental listings now offer some form of concession, which may be a discount on rent, assistance with moving costs or a cash bonus for signing the lease.
Its data has also picked up on the fact that more tenants are opting to renew their leases rather than face the prospect of moving home.
You can leverage several factors in your negotiation, such as local rent trends, the time the property has been vacant and the condition of the property.
Here are some tips for negotiating a lower rent, and I hope they help accelerate your savings progress so you can buy your first home faster than originally planned:
Demonstrate reliability – From a landlord’s perspective, picking a tenant can be a bit of a lottery, so demonstrate how you will be a good tenant. Offer references, especially from previous landlords, and show that you have a stable income to meet the rental fee.
Credit score – A good credit score counts for a lot. Landlords are anxious to avoid tenants who don’t pay on time, or skip rent entirely. They can lose significant revenue if their investment property is empty for an extended period.
Be helpful – Reassure the landlord you will be proactive in highlighting any issues with the property. Most landlords accept maintenance costs are part of their overhead, and they’ll be grateful to be able to fix small issues before they become big ones.
Rental trends – Understanding the trends in rental property costs will allow you to negotiate with confidence. Whether you’re renewing a lease or discussing a new arrangement, you can avoid paying too much by doing due diligence on the neighborhood rental market.
Like-for-like – When comparing costs, make sure you’re comparing similar properties. A two-bedroom apartment is usually more expensive than a New York-style loft. Amenities like a swimming pool and gym influence the rental price, too.
Additional costs – You should always check on the fees a landlord wishes to charge you. See if utilities are included in the deal. Fees for parking and pets are quite common, too.
Doing a deal – If you watch for rentals that appear stuck on the market, you have a good chance to win a great deal. Landlords do not like their properties sitting empty. However, they’re also aware that dropping the rent too low will fundamentally affect market values. So, resist the temptation to lowball an offer for a rental you want.
Longer lease – Offering to sign a longer lease may or may not be welcomed by a landlord. It depends on the local market and whether the owner is confident they can find another tenant quickly. However, you are giving them a guarantee of long-term income. This approach could go either way.
Don’t rush – Be the good person here, and allow your prospective landlord to think about the deal you’re offering. In the meantime, keep looking to see if you can find a better option in the neighborhood.