Today we have a fabulous guest post from the folks at Zillow about negotiating lower rent. I'm a huge fan of Zillow! We used some of their tools when buying our home over 2 years ago and still enjoy checking out properties on Zillow on occasion. For those still renting, read on! And when you're done, you can search for apartment and home rentals on Zillow.
Most renters assume the advertised price on an apartment is the price they’ll pay, but in most cases additional costs such as deposits, fees, insurance and utilities apply. In fact, the advertised price may only apply to the cheapest available unit. Before getting discouraged, consider that renters may be able to negotiate lower monthly payments depending on demand in their local rental markets. While it takes a little legwork to effectively negotiate the price, it can save renters hundreds -- sometimes thousands -- of dollars throughout the duration of their leases. Here are three tactics to help renters negotiate rent.
Know the market
Consumers who understand their local rental markets are able to negotiate more effectively. Renters should figure out rents charged for apartments comparable to the units they want to or currently rent. If comparable properties charge less rent, then renters may have room to negotiate. In a hot rental market, landlords may receive multiple applications for each unit, with some applicants offering to pay more to ensure they get the apartments. In these competitive markets, renters are generally at the mercy of a landlord’s asking price. In cooler markets, landlords may be more willing to negotiate.
To determine a fair market price for an apartment, renters should check out the rental section on sites such as Zillow.com, comparing asking prices, number of bedrooms and bathrooms, square footage and amenities such as dishwashers, washer/dryers, balconies, free gyms and courtyard barbeques. Renters should ask around about the rental markets they’re interested in; are the markets easy to navigate, accessible or highly competitive? Research helps renters determine whether they can negotiate rent, and if so, by how much.
If the landlord is asking a higher-than-expected price, renters can counter with their research when asking for lower prices. Often renters should quote a slightly lower rate than they’d actually pay, as landlords typically counter with a higher price; and the two parties generally meet at a price in the middle.
Before renters try to negotiate rent with a landlord, they need to look good on paper. First, renters should make sure they have good credit by checking their credit scores on AnnualCreditReport.com, which gives consumers one free score each year. Look to correct any errors on credit reports before sending in rental applications. Credit scores range from 300 (very poor) to 850 (excellent); the rating is based on how frequently consumers pay bills on time (35 percent), amount of debt owed (30 percent), how long they’ve had credit (15 percent), new credit applications (10 percent) and types of credit (10 percent). Consumers should work to pay their bills on time and pay down debt to gradually improve their credit scores, as landlords find renters with higher credit scores more desirable.
Landlords also prefer renters with some savings in the bank, as this ensures their ability to pay rent even if they lose their jobs. Renters may also want to print out a list of former landlords’ contact information to provide referrals. Finally, when going to view an apartment, renters should appear groomed and professional in a business-casual outfit. All of this shows a landlord they’re responsible and prepared to take good care of the apartment.
Commit to a longer lease
If the landlord seems resistant to giving a qualified renter with good credit and references a lower rate, the renter can offer renting the apartment for longer than a year. Ask to sign an 18- or 24-month lease in exchange for lower monthly rent. Finding new tenants can be an expensive process for landlords, so many prefer to sign qualified tenants onto longer leases, even if that means a little less money each month. Be committed to the longer lease, as some leases include penalties for breaking the lease, such as paying back all concessions earned throughout the duration of tenancy.
If renting is the best financial decision or simply the most affordable option until consumers can afford purchasing a home, then they should take full advantage of the savings effective negotiating can earn them. To successfully negotiate lower monthly payments, renters should know the rental markets in their areas, improve their credit scores, collect solid references and keep savings in the bank. If those factors don’t lead landlords to offer lower rents, renters can offer to sign longer leases.
Jay Robert is a mortgage writer for Zillow and an associate with Kassoff, Robert & Lerner, LLP, focusing in the areas of elder law, real estate, special needs law and estates.