13 Ways to Lower Your Rent
Rental prices aren't set in stone, even in highly competitive markets, so elbow grease and negotiation skills can yield hefty savings. Just ask Davis Nguyen, an associate at the management consulting firm Bain & Co. in San Francisco, one of the priciest cities in the country. While the average cost of a one-bedroom apartment is nearly $3,500, Nguyen pays less than half the median price for his place. He cites the effort he puts into getting to know the landlord and the way he approaches the application process. Here are some of Nguyen's top tips for securing a discount on rent, as well as additional tactics for those already renting.
Nguyen spends a fair amount of time researching the landlords of properties he's interested in, including reviewing their LinkedIn profiles, Googling them, and reading any public records available online. The effort is all part of establishing a personal connection and relationship with a landlord, which will ultimately help you secure a rent discount. "I try to figure out what things I have in common -- did we go to the same school, volunteer at the same place -- so that when I actually meet them, I'm able to talk in a common language," Nguyen says.
If you have the opportunity to meet the landlord at an open house for the rental property, don't waste that opportunity to differentiate yourself. "Once I get there, I try to make it less about me," says Nguyen. "A lot of people talk about themselves, their credit score, but in reality what it should be about is the landlord. In a competitive market, you'll find many people with the same credit score, and a landlord is going to see your credit score on the application. But what you can show them at the open house is your personality and how you will fit into the property, the intangibles they're not going to see on an application."
In addition to letting your personality shine, the goal of that first conversation is to obtain a few key pieces of information that will be part of subsequent negotiations. "There's two things I'm looking for. First, I want to know what is their idea of an ideal tenant?" Nguyen says. "And then I will ask about past tenants -- things they loved, things they did not love. What gave them nightmares?" All of this information will be used for the next step in the negotiation dance.
Take everything you learned during the conversation with the landlord and craft a cover letter that both addresses pain points and highlights your commonalities. Did the landlord mention that a previous tenant had a pet that destroyed the place? Make it clear in your cover letter that you're far more responsible, and offer examples. Nguyen has even included pictures of his past homes with cover letters, in order to prove how well he maintains the places he lives.
Nguyen has also made a habit of having the cover letter translated into the landlord's native language, if English is not their first language. It's an added bit of effort that helps strengthen your connection with the landlord, he says. "I've done cover letters in Cantonese, Spanish, Chinese, Thai, Vietnamese," he says. "I figure out what their native language is and then I go online and find an inexpensive translation service. It goes a long way with the landlord."
The real purpose of all of these steps Nguyen has described, is getting the landlord to like and trust you, and ultimately, to make it easy for the landlord to want to have you as a tenant. With this accomplished, asking for a discount on the rent is much easier. "The best advice I ever got about negotiation is that the best way to negotiate with someone is to get them to like you," Nguyen says.
When it finally comes time to talk money, make sure you've done your research. Know what the market rate is for the type of home you are seeking to rent. If the rent is higher than average, ask the landlord to reduce it. "I usually say 'This is really high compared to market average, how can we get this lower?'" Nguyen says. "And at this point, I have usually talked to them so much I know what they are looking for and what their pain points are."
Does the landlord need someone to mow the lawn? Offer to do that. "One of my landlords lived a couple cities away and would come to mow the lawn," explains Nguyen. "I mowed the lawn, so the landlord didn't have to do it. It's about discovering something painful for them and offering a solution." Does your landlord have a website that needs improvement? Or does he or she need advertisements designed? If you have the free time and the skills, the possibilities for working in exchange for a discount are endless.
Yet another tactic that often encourages landlords to lower the monthly rent is offering to sign a longer lease than they are asking for. Is the landlord seeking a one-year lease? Then offer to sign a two-year lease if you're comfortable doing so. One of the biggest financial burdens a landlord faces is an empty, unrented property. Signing a longer lease eases this problem.
Nothing talks like cold, hard cash. If you have the money to pay rent up front, in cash, a landlord may be quite willing to offer a discount, according to various experts. For example, offer to pay six months in advance, in exchange for a discount.
Another unique approach: You can offer to pay a deductible on any repairs that may arise during the course of your tenancy. In other words, offer to pay the first $150 of any needed repair. This eases a major hassle for landlords in the form of having to arrange for small repairs. The downside, however, is that you could end up fixing many things on your own dime. So take a hard look at the property before offering this type of arrangement.
Yet another option that may make a landlord far more willing to negotiation the rental amount, offer to pay your rent well before the first of the month. Perhaps even consider giving the landlord pre-dated checks.
Does the property come with a garage that you won't use because you don't have a car? Then rent out the garage to help offset the monthly rent. Or in Nguyen's case, he allowed the landlord to rent out a garage he wasn't using, and the landlord took $200 off the rent. Other versions of this same idea include renting out your entire apartment when you're not there. Airbnb, anyone? If you live in a popular city and are comfortable letting travelers bunk in your home, it's possible to make a few hundred dollars a night.
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