Massucci's Take: How to lower your rent 15 percent in a month
May 18th 2009 8:00AM
Updated Dec 4th 2009 11:36AM
Maybe not everyone can pull it off. Here are strategies that I used and by following them, maybe you can too.
I've narrowed it down to three key elements: be patient, be persistent, and be a pain.
First, don't fool yourself. If you want to get it done, you'll have to be a more patient negotiator than your landlord. When dealing with money, that's easier said than done. Think of it as if you're buying a car. There are lots of cars on the lot and you simply want the best price. You lose the battle if you fall in love with a certain car. Don't become emotionally attached -- and if you are, do your best to act like you are not. There are lots of apartments out there and you want to get the best price you can. Remember, you're renting here, not buying.
Second, as in my case, this venture will test your patience by requiring (too) many phone calls. So you need to persevere. Turn it into a game that you want to win. When you feel like giving up or not calling back or think you are wasting your time, remind yourself that If you do wind up saving money, it's worth it.
Third, be a pain. This was a negotiating tip I picked up from Timothy Ferriss while reading his book, The 4-Hour Workweek. The idea is if you make a big enough pest of yourself, you become a problem that your landlord will want to solve. Don't be afraid to ask lots of serious questions to help get what you want.
We're taught to be nice and think it'll get us ahead. That may be true (or not) in life, but in negotiating, it works against you. I'm easy going, so being difficult took some effort on my part. Although, when it comes to my family and our welfare, it wasn't hard to conjure up the shark in me. It doesn't mean you should be rude or angry, just firm. You know what you want and you're going after it. Being a pest will help get you there.
Other tips: You need leverage. Shop in your neighborhood or close by to get a competitive price that is, hopefully, lower than your place with similar square feet, bedrooms and bathrooms. Knowing the market, or at least similar prices in your building or neighborhood will help you ask smarter questions.
Be flexible. Be ready to walk away from your current place or not take a new rental if you don't get the price you desire. If you're not willing to walk away, you lose most of your leverage.
One thing you can't control is timing. In my case, my lease was due for renewal in late February of this year. I began negotiating in mid-January and it took about a month. After eight to 10 phone calls with my landlord and his assistant, I got 15 percent knocked off of my annual lease renewal, instead of the eight percent raise they told me I'd have to pay to renew. Had this been two years ago, or two years from now, that kind or discount, or any discount, may not have been possible.
I was patient. I kept negotiating even though days sometimes passed between calls. I persevered even though the person I was negotiating with kept saying no to my requests and my wife wanted the process to be over. I was a pain. I'd say, "why can't this happen?" and kept asking for more. When I heard no, I'd say, "are you sure?" Or, "can you check with your boss just to be sure?"
I had leverage. I knew of a similar sized apartment in a nearby neighborhood that was about 20 percent less than what I was paying. From talking to neighbors, I knew that there were more vacancies in my building than usual. I was flexible during my negotiations, but I also made it clear that we would be happy to move if they couldn't lower our rent. Most of all, I was lucky that my timing was right. My lease was up for renewal and the U.S. economy was in dire shape.
Finally, be sincere. It makes for a much better negotiation. If you're faking it and aren't willing to move or can't backup your bargaining with real facts, it will likely become apparent.
If you are successful, here's my final tip: Celebrate. Reward yourself for a job well done. It will reinforce that the hassle was worth it.
If you can't negotiate or your landlord doesn't budge, don't beat yourself up. If you asked and did all you could and you can't or won't move, accept it and move on. When the economy is growing and it's an owners market, so to speak, this will be much harder to pull off. Take advantage of the opportunity while you can.
The worst that could happen is you get the mandated rent increase and pay more, just like most or all of your neighbors. Take heart, there's always next year.
Good luck. Remember, there's a shark in all of us. Start swimming.
Anthony Massucci is a senior writer and columnist for DailyFinance. If you have any questions about this, or any column, you can reach him on Twitter at hianthony.