Whether you’re renting your first apartment or your fifth one, getting the best deal on rent should be a top priority.
That’s because rent may be your largest expense.
According to Apartment List, the national median rent for a two-bedroom apartment was $1,302 as of September 2021. Year over year, this represents a 2.1% increase in rent prices.
If you’re living on a tight budget, attempting to negotiate a lower price on rent is one way to stretch the money in your bank account. There are other creative ways to save money on rent as well.
Here are some tips to negotiate a better deal on rent and save more money.
Is Rent Negotiable?
You might be surprised to find out that rent prices are negotiable. You can negotiate your rent before signing a new lease and when it’s time to renew your current lease. And, in some instances, you can renegotiate your rent before your lease ends. Keep in mind that this will not be the case for everyone: it’s situational, and results will vary depending on your landlord, location, unit, and lease.
So now that you know you can negotiate your rent, is it worth all the trouble? The obvious answer is yes, because you can save money. But negotiating rent can go beyond just monetary benefits. Here are some benefits that can come from negotiating your rent.
Why You Should Try to Negotiate Your Rent
More Spending Money
If you are like most of the U.S. population, a large amount of your paycheck goes toward rent every month. So imagine if you could shave off a few dollars each month. Even a small percentage of your rent can save you thousands of dollars a year. What would you do with that extra spending money? You could invest it in your future or use it for a vacation. The possibilities are endless.
Getting the Best Value
Negotiating a better deal on rent is more common than you might think. Many tenants might be able to manage to reach an agreement with their landlord on a lower rent increase. That means that if you’re signing your lease without trying to negotiate your rent, you could be paying more than the fair market price for your dwelling.
Form a Stronger Relationship With Your Landlord
Negotiating your rent could actually improve your relationship with your landlord or property manager. If done respectfully, negotiating your rent can be a great way to remind the landlord that you are a good tenant, and facilitate a stronger and more open line of communication.
How to Negotiate Rent
Negotiating rent is similar to negotiating a higher salary, a promotion, or anything else.
You have to make a strong case as to why a landlord should consider giving you a better rate. Just like in salary negotiations, you need to bring something of value to the table. In the case of a raise, you can discuss your skills or experience.
When rent is on the table, here are some approaches for adding value.
1. Agree to a Longer Lease
One of the simplest ways to reduce rent and land a better deal is signing a longer-term lease, says Garrett Derderian, managing director, market analysis at CORE Real Estate in New York City.
“Oftentimes, landlords are willing to offer 1 to 3 months free if a renter signs an 18- to 24-month lease,” Derderian says.
“The added free months reduce the net-effective rent the tenant is paying.”
For example, say you’re renting an apartment for $1,000 a month. You agree to sign a 26-month lease instead of 24 months, with 2 months’ rent included free. Altogether, you’ll pay $24,000 in rent payments but when you average it out across the 26-month lease period, it’s like paying $923 per month.
When weighing a longer lease, make sure it’s a good fit for your short-term plans. For instance, if a job change and a move to a new city is in the cards, negotiating a longer lease might not be best as you may have to pay a penalty for breaking the lease agreement early.
2. Offer the Landlord a Service
Another idea for how to negotiate rent is to offer the landlord something more tangible in the form of service.
“I was renting a room in a home that was near the campus. The rent was $600 a month but I negotiated it down to $500 by offering to do yard work each week,” says Beach.
In exchange for a $100 a month savings on rent, Beach was responsible for mowing the lawn and trimming bushes regularly. She says this is something you can try if you’re renting a home or a room in a home with a yard.
If you’re not the outdoorsy type, there may be other services you can offer. For example, if your landlord is elderly, you might offer to assist with running errands. Or if they have pets, you could trade a discount on rent for a daily dog-walking gig. Just remember to keep the value of the service you’re offering in line with the amount of the rent discount.
3. Prepay or Pony Up a Larger Deposit
Most landlords expect you to offer a cash deposit as security when renting a place. According to Zillow, this deposit could be anywhere from 1 to 3 months’ rent, although the typical amount paid by renters is $600. If you have enough cash to cover the security deposit as-is, you could potentially negotiate rent by offering a larger deposit or prepaying some or all of the rent in advance.
“Landlords are just like everyone else: they feel a strong temptation in the face of a large cash payment all at once,” says Brian Davis, real estate investor, personal finance educator and co-founder of Spark Rental.
“Often they’ll accept a lower monthly rent if you offer to pay 3 to 12 months’ rent upfront when signing the lease.”
Remember, this technique requires cash in reserves. If you don’t have a substantial amount of money tucked away yet, consider opening a savings account and scheduling regular deposits so that when you’re ready to try this move, you have the cash you need.
4. Offer to Pay Your Rent Early
Your rent payment itself isn’t necessarily the only thing a landlord values, Davis says.
“They also crave consistency and reliability in the ongoing rent payments.”
One strategy he’s used in the past for how to negotiate rent is offering to pay the rent ahead of the monthly due date in exchange for a lower rate. He negotiated a landlord down from $2,200 a month to $2,000 a month by incorporating terms into the lease contract that specified he’d pay early every month. If he missed a payment, the rent would revert back to the original $2,200 rate. The landlord agreed, and Davis was able to save $200 every month while renting.
If you know you can be consistent in paying your rent early, this can be a highly useful tactic for lowering your rent and saving money. And, you can make paying rent easier by setting up direct deposit for your paychecks. With direct deposit, it’s possible to get paid up to 2 days early.
5. Do Your Research
One final option for how to negotiate rent is to play a little hardball. When the landlord quotes a rental price, you can say “thanks, but no thanks” to see how they react.
Just make sure to do your homework. Here’s why.
If you’re trying to rent in a high-demand area, you’re likely competing against other would-be renters. If there are 5 people trying to land the same apartment, the landlord can easily find another renter if you play hard to get.
So, when researching rentals, learn about the overall market demand, and use a tool like Rent Jungle to see how rent prices are trending. The best-case scenario is to find a rental that’s been vacant for more than 30 days in an area where rent prices have flatlined or are minimally increasing. While this is a gamble, it may pay off.
Best Times to Negotiate Your Rent
Situation and timing are two of the most important factors in a successful rent negotiation. Make sure you approach your landlord with your request at the right time.
Here are some of the best times to negotiate your rent:
- During winter: Winter is a harder time for landlords. This means you’ll hold more of the bargaining power, as landlords might be more accommodating if you approach them when they are struggling to find new tenants.
- Few months before your lease expires: If you’re dissatisfied with your rent, but your lease expires in a couple of months, ask your landlord if they’d renew your lease at a lower price. Chances are they’d rather keep you for less than spend time searching for a new tenant, which could cost them more money.
- Before you sign your lease: You can negotiate your rent even before you sign your lease. Agreeing on the rent price should be one of the first things you discuss with your landlord before consenting to the terms of the lease.
Can you negotiate rent on a house?
Yes. It doesn’t matter if you live in an apartment or a house, if you are renting, then there’s an opportunity to negotiate how much rent you pay.
Can you negotiate rent after signing a lease?
Yes. Even after signing a lease, you can still negotiate your rent. Utilize some of the tactics above to give it a try, and keep in mind that you’ll probably hold more leverage if you negotiate a few months before your lease expires or when it’s time to renew your current lease.
How do I ask a landlord to reduce rent?
The first thing you have to do is take the plunge and simply ask your landlord or property manager to lower your rent. If you find that they are on the fence, then it’s time to negotiate.
Consider the following negotiation tips:
- Negotiate in person — It’s harder to say no to someone who’s face-to-face with you.
- Come prepared — Do your research and bring compelling evidence, such as, references from previous landlords, record of on-time payments, credit report with a good credit score, market research, etc.
- Know what to ask for — In lieu of rent you can also ask for a deal on amenities and benefits, such as parking spaces, apartment upgrades, additional storage, gym membership, etc.
Is it better to negotiate as a new tenant or as an existing tenant?
Both new and existing tenants have a fair shot at successfully negotiating for lower rent. Negotiating rent for an existing tenant can be a challenge due to lack of leverage; because you already live there, why should your landlord drop your rent now? But ultimately it’s all about how you frame the negotiation. Capitalize on you being a good tenant and how much easier it would be on them to keep you around instead of looking for a new person to move in.
If you’re successful in negotiating better rent terms, consider what you want to do with the money you’re saving. For instance, you could build your emergency fund or pay down some of your student loans. Or, you could save up for a down payment on a house.
Regardless of what you use your extra cash for, make sure you plan wisely for your financial future.