With the possible exception of “crazy neighbors” and “rat infestation,” no two words strike more fear into the hearts of renters than “rent increase.” If you know or suspect a rental price increase is coming, don’t just wait for it to hit your bank account. Speak with your landlord. Make it known that you wish to negotiate a rent increase.
Don’t know how to negotiate a rent increase? Here’s what you need to know about the current rental market and a few ideas to consider if you’re facing a rental price increase.
A look at the current housing cost trends.
Rent increases are — unfortunately —something that most Americans are currently facing, particularly if you live in or around a bustling metropolitan area. Whether you’re looking to rent or buy, it’s likely you have discovered that this is a competitive housing market: selections are slimmer and your dollar won’t equate to quite as much square footage as it once could have.
At $2,002, the average median rent pricing in the U.S. is at an all-time high in 2022. According to Redfin, “Rents are up more than 30% in Austin, Seattle, and Cincinnati. In Los Angeles, the median asking rent is $3,400. Even in formerly affordable cities such as Nashville, it’s now $2,140, up 32% from last year.”
That means that many are struggling to pay rent — and could even be facing potential eviction.
But why are rent prices so high in the U.S. now?
Much like with any commodity, housing and rental prices are directly tied to factors such as economic inflation and supply and demand. The current housing demand is greater than the current supply, which has resulted in higher prices. Inflation refers to costs going up across the board — including housing, groceries, and other essential items.
When will rent prices go down?
If you’re wondering, “When will rent prices go down”, we’ll have to go back to supply, demand, and inflation. Housing prices will decrease — or at least level off — when demand decreases or supply increases. In other words, housing prices will likely drop a bit when more housing options are built or created. Factors such as building material costs, labor availability, and interest rates can also play a role in rent and housing prices.
What are preferential rent, rent stabilization, and rent concessions?
When you want to negotiate the cost of rent, you’ll have a few options. Generally, you’ll either be asking for preferential rent or a rent concession. Depending on where you live, you may even be able to ask for rent stabilization. While the terms may sound similar, there are some key differences between each of these terms.
To start: what is preferential rent? Preferential rent is when an owner agrees to charge a rent price that is lower than the legally regulated rent that the owner could lawfully collect. To get preferential rent, you’ll need to talk with your landlord or leasing company and have them create a new leasing agreement with your agreed-upon terms — including your rent price.
Depending upon the agreement you strike with your landlord and where you live, preferential rent could turn into “rent stabilization”. Rent stabilization means that your rent won’t increase so long as you remain a tenant. In some cases, this can even mean that if a family member takes over your lease at any time they’ll be able to pay your set rent price. This is why many keep NYC apartments in the family for generations.
The term “rent concessions” can refer to a special offer or discount. Property managers or landlords may provide a rental concession to entice new lessors to move in — “First Month’s Rent Free” or “No Security Deposit Required” are both examples of rent concessions. Current tenants may also be offered rent concessions — sometimes in the form of taking off one month’s rent, keeping the rental price the same despite increases across the property, or through another perk such as a free parking spot in an otherwise paid lot. The tricky thing about rent concessions is that they can be one-time or long-term. You’ll need to take care to read the terms and conditions of your leasing agreement.
No matter which route you choose to go, you’ll want to get familiar with your state and city laws and renter’s rights. And, don’t forget to carefully read through your leasing agreement!
5 Tips for Negotiating Rent Increase
1. Be clear with your ask.
So, you’re currently renting, wish to stay in your unit, and are faced with a rent increase. Much like if you were negotiating a short-term lease, you’ll want to have a clear idea of the terms you’re asking for. In this case, it’s likely what you’re after is preferential rent or a rent concession. Basically, that’s legalese for you’ll need to have a conversation with your landlord about keeping your rent at its current number and have a new lease drawn up and signed.
2. Gather data.
Rentometer provides an overview of similar rental unit costs in your area. It lists dollar amounts, categorizing results in easily digestible language such as “good deal,” “reasonable,” and “way too high.” ApartmentSearch is a great way to collect up-to-the-minute data about apartments for rent in your area, too. Not concerned about a rent hike right now? Consider identifying comparable units anyway, printing their related data, and filing them. Or take screenshots and save them to your computer. This info will provide you with historical data you may be able to use to your advantage.
3. Use cash and time.
It might seem strange at first, but you might be able to negotiate a lower rent by agreeing to pay in cash or by offering to sign a longer lease. After all, less time spent trying to fill an empty apartment is more money and peace of mind for your landlord.
4. Be on your best behavior.
Speaking of peace of mind: Your good behavior as a tenant may make a valuable negotiating tool. Industry executive Alex Larsen told Time.com, “If you’re renewing a lease, your track record as a good tenant can be a bargaining tool for landlords who don’t want to risk losing you or pay the cost of sourcing a new tenant if they’re paying a broker’s fee.”
Attorney Alex Stern told the same website, “From the landlord’s perspective, a bad tenant can cost much more than some lost rent. Emphasize your positives that always pay rent timely, you have stable employment, you’ve never had past issues with other landlords, etc.”
So, if you’ve proven that you’re a reliable tenant that pays their rent on time, don’t be afraid to leverage those strengths in negotiations with your landlord. Consider using some of the tactics you might try if you were struggling to find someone to rent to you, such as writing an ask letter and using kind, professional language.
5. Put in some elbow grease.
It’s the age of the gig economy. Uber, Lyft, and other companies have made it commonplace for people to hire themselves out. Approach your landlord with the idea. Handy with a hammer? Available to address on-site issues for other tenants? There could be cost savings for both of you. A genuine win-win. There are even online forms to help you get started!
Find an Affordable Apartment With ApartmentSearch
So can you negotiate rent? Absolutely. But it’s not as easy as a simple request. Make sure you’re ready to ensure a win-win scenario for everyone. If your landlord won’t budge, turn to ApartmentSearch. With our advanced filtering options, you’ll be able to find apartments within your budget that suit your needs — there’s no need to sift through dozens of dead-end listings. Don’t overpay on rent. Get started with ApartmentSearch today.
The post Rent is Going Up. Here’s How to Negotiate a Rent Increase. appeared first on Apartment Life.