As the housing market continues to flounder, a growing number of homeowners are ditching their mortgage for a lease. And many renters who once thought about buying homes, have decided to hold off. For now, the market is on renters' side, but that could soon change.
Negotiating a cheaper rent now before you sign or renew a lease can save you hundreds, if not thousands of dollars a year. Joe Youngblood at UMoveFree.com, the largest apartment finding service in Texas, gave us this checklist: do your research, particularly about comparable properties in your immediate neighborhood or complex; be flexible -- don't get emotionally attached to one apartment or neighborhood; and, most of all, don't be afraid to ask for a reduction.
That's good advice to start off with, but there are some less conventional ways to cut that monthly rent check even further. Here are some tips from renters, landlords and real estate experts:
Offer to pay money upfront
Alex Monroe, founder and editor of GetYourBizSAvvy.com, says he consistently offers to pay six months of rent in advance in return for lower rent. "This worked at all the places I went looking for an apartment," he says, including the two-bedroom, two bath apartment where he now pays $925 a month.
Assess the competition
Marty Turman managed to talk his Las Vegas landlord down $1,000 a month in July 2009. How did he do it?
"The greatest tool any negotiator has is market knowledge," Turman says. Know what else is on the market, what is truly comparable to the place you want and "what the competition can offer that your target cannot." That last bit of information is your leverage, allowing you to "let the property/manager know you are interested in their offering but can get something nearly exactly the same (for less) or better for the same price."
Make your assets work for you
Having good credit makes your position particularly strong in the current economic climate, where many potential renters have much weaker scores, says Turman.
In Turman's case, he and his wife had owned two previous homes before opting to rent. They had good credit and income. "We put ourselves in the driver's seat and let the (manager)/landlord come to us," Turman says. "We... let them know the desirable qualities we possessed and the concessions they would have to make in order for it to work (price, utilities, etc.)"
As a result, he says, "we have by far the lowest rent of comparables in the neighborhood and love our home."
Sweeten the pot
We wondered whether looking at it from a landlord or property manager's perspective would bring any fresh ideas and, indeed, it did. Many agreed with motivational speaker and landlord Barry Maher of Corona, Calif., who said the most successful negotiators "are the ones who offer something in exchange."
Surprise, surprise: Landlords want to know what's in it for them. Among Maher's soft spots are potential tenants that offer to do work, like gardening or painting, and those who offer a bigger deposit.
Offer to rent for more than a year
"One of the biggest hassles for a landlord is finding a new tenant, the vacancy in the interim, and the clean-up that follows a move out," says Don Tepper, a real estate investor and landlord in Fairfax, Virginia. "Many landlords will lock in a two-year rate at no more than a one-year rate... eliminating the second year increase."
Seek properties that have been vacant for awhile
Properties that were previously for sale but are now on the rental market usually mean a desperate landlord is trying to make some money off of the property and cut some of his costs, including the high cost of insuring a vacant property, says Tepper.
Offer to pay a deductible on repairs
"Offer to pay the first $150 of any needed repair," suggests Tepper. Owners may be willing to come down $100 to $200 a month to avoid the hassle of worrying about and arranging for repairs. Of course this represents a risk to the renter, too, so consider the condition of the property before making this proposal.
Offer to be the building superintendent
Another way to cut the rent, especially in New York, is to volunteer to be the superintendent of the building, says Issamar Ginsberg, a manager and landlord in New York. Of course, that means you'll have to be on call for repairs, take the garbage out and shovel the sidewalks when it snows, but the pay off could be well worth it if the price reduction is right.
Pay early, pay less
"Ask for a reduction if you pay on or before the first [of the month]," says Ginsberg. You can even give pre-dated checks ahead of time.
Submit a proposal
For existing renters who find their rents escalating -- or for those who've seen their income take a nosedive -- Mia Melle with southern California property managers Renttoday.us suggests: "(Submit) a proposal for a lower rental amount along with a 30-day notice to vacate if the desired amount is not accepted."
If the request is reasonable and within market rate, Melle says,"the owner may feel a vacancy will be more costly than the reduction and give in."
When all else fails, get rid of cable. Playwright Brooke Berman has lived in one of the priciest markets in the country, New York, since she was 18. A week ago, Berman released a book about her life's journey through the rental world called No Place Like Home: A Memoir in 39 Apartments. Yes, 39.
One piece of advice this veteran tenant offers: 'Know your bottom line and also your stretch room. Make sure your home doesn't overwhelm your monthly expenses. But, on the other hand, if home is really important to you, you might find yourself making a few other adjustments (like no cabs, no TV, no cable) in order to afford the right one."
Berman did just that in 2004 when she moved into a $1,350 one-bedroom apartment. 'The feeling of being in the right place made up for my makeshift furniture (really, a steamer trunk with cushions can be a great couch)," she says.
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