The Money Mustache Community
Learning, Sharing, and Teaching => Real Estate and Landlording => Topic started by: Villanelle on September 28, 2018, 06:08:47 AM
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For the first time in a zillion years, we are going to be in the US rental market very soon. I'm doing a lot of scouting now to get an idea for areas where we can get at least most of what we want for our budget. I'm checking out Zillow, Hotpads, etc.
What I'm wondering is whether most landlords (for private rentals And large complexes) generally expect to get asking or if the listed rents are starting point for at least a little negotiation. As a landlord, we've always gotten asking, but truthfully we'd have taken less and told our PM that. Just trying to figure out what is typically so I know whether the places that are only a bit over budget might still be worth at least looking at.
(To be clear, we don't move until February so I'm not looking at specific places yet. Just narrowing neighborhoods around which we will focus our eventual search.)
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Many landlords won't negotiate rent unless they are in an area with a lot of vacancies. Smart folks will set the rent as a function of the median and stick with it on the basis that they don't want the hassle of dealing with someone who can't afford the place.
Maybe its different for large apartment complexes. I don't know.
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Id say big companies are much less likely too. But I am happy to negotiate rent because usually it gives me an even more advantageous deal. You cant go in and be like yeah I want 20% off rent. But if you offer to mow the lawn and shovel the snow they might be much more likely.
Vacancy of course matters, if I am having a hard time renting it id be more willing to drop the price.
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Long leases can get you reductions with "big companies". For smaller landlords it depends on the person.
If you are renting at the lower end of the market (say ordinary apartments or smaller 2 or 3 bdrm houses) don't expect to be able to haggle at all unless vacancies are high in the area.
If you are renting a luxury house/apartment you can probably negotiate the price unless they have very low vacancy.
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don't expect to be able to haggle at all unless vacancies are high in the area.
This.
It's an immediate red flag to us if a prospective tenant wants to negotiate. We do quite a bit of research before we decide on a price.
and as was stated here
Vacancy of course matters, if I am having a hard time renting it id be more willing to drop the price.
if there are no bites, the price is probably too high.
Vacancy is VERY low in our town.
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I've had people try and always said no. I would maybe be open to discussion but only if you were a very solid tenant and I wasn't getting a lot of interest. If you're a marginal tenant tenant, no chance.
I have friends who've gotten free add-ons that big complexes normally charge for included, such as one friend got a garage parking place included that's normally an extra $50. Those little things you could get tossed in.
I would be more likely to be flexible after you've proven yourself a good tenant, like maybe negotiating the increase in year two or a re-lease incentive bc I know you're good. For example, I waived a late fee recently for a guy who paid on time for 2 years and called the day before rent was due to say his check was late bc of some issue and he'd pay on the 6th (5th is late).
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It's very uncommon in the US and, if your market is strong, just asking will hurt you.
It waves a huge red flag for "I am a pain in the neck" or "I can't quite afford the rent" and if the landlord has anybody else qualified to rent to, they will become much more likely to choose them.
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It's very uncommon in the US and, if your market is strong, just asking will hurt you.
It waves a huge red flag for "I am a pain in the neck" or "I can't quite afford the rent" and if the landlord has anybody else qualified to rent to, they will become much more likely to choose them.
Okay, sounds like we can expect to pay the published rents then. Thanks!
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It seems common to reduce rents for longer leases. I've seen prices shaved by a couple hundred per month or more for a 2 year lease vs a one year lease or a month to month rental.
^This^ I have rentals in a resort area. Tenants frequently offer a three year lease for a slightly reduced rent. I usually say no. Instead, I offer to give them the asking rate for the full three year period. This locks in their rate, which has the same effect. It's kind of a reverse engineered price reduction. It works for everyone because it keeps turnover low and gives the tenant peace of mind that their rents not going to get jacked up annually.
In my experience as a tenant, renting from a private party and being a model tenant meant they often skipped annual rent increases. At the end of ten years, I was paying well below market rate, and they hadn't missed a single month's rent, nor had they had to replace the carpet or paint.
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As a renter, I have always tried to negotiate rent price. Private landlords have always been more amenable to negotiate price, but large public realty companies can/will negotiate under the right circumstance, but it is is much less likely.
I disagree vehemently with the above assertion that negotiating price is not going to happen unless there is high vacancy rates. Here in my part of south OC, vacancy rates is insanely low and renter wars occur when a property becomes listed. Despite that, I have successfully negotiated rent over the past 8 years here with private landlords. It just depends on leverage. A landlord may be willing to conceed a few $s for a renter who is of very high quality with a proven track record of trust and responsible leasing, as opposed to taking a crap shoot with an unknown future tenant, despite all the info one can get with background/credit checks etc..
YMMV
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The last place I rented I offered a check for 6 months' rent paid in full in exchange for a $50/mo reduction in rent. Not a huge discount, but it was something, and I didn't want to push it to $100 off since it was already a cheap place. The landlord accepted instantly.
For a more expensive place in the $1000+ range, you might be able to got more chopped off. Depends on the landlord of course, but something to consider!
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My small town has gone crazy with housing and rent prices. I've seen people ask if rent prices were negotiable, and the response I've seen other than just a simple "no" was "Sure! How much more would you like to pay?" So, it may really depend on the area.
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The last place I rented I offered a check for 6 months' rent paid in full in exchange for a $50/mo reduction in rent. Not a huge discount, but it was something, and I didn't want to push it to $100 off since it was already a cheap place. The landlord accepted instantly.
For a more expensive place in the $1000+ range, you might be able to got more chopped off. Depends on the landlord of course, but something to consider!
We are likely to be in the $3000 range! (And no, these aren't high end properties. It's just an expensive area--DC metro--and we want an commute that DH can make by bike most days.)
I would definitely be willing to pre-pay for 6 months though. No problem. And I'd probably be willing to sign a long lease, but with military renteres (which we are) that's not always of tremendous value because we can legally break a lease if/when receiving orders out of the area. So a three year lease means we have to stay for three years... unless he gets orders.
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yeah I answered above and FWIW, in my area, $1k a month isn't "an expensive place" it's more like "can I use your driveway"
I am both a landlord and renter in this city. The only "discount" I have ever given and received has been a lease that locks in future price increases so that upon annual renewal the rent can't raise as fast as the market normally does. As a tenant it felt like a huge score. My rent can't shoot up! The raises are guaranteed to be very small and manageable. As a landlord it was a relief, one less thing to worry about. Because if all is well with the tenancy and we are renewing then at least I don't have to re-negotiate pricing and wonder about scaring them off and the hassle of advertising and signing somebody else. I know I am leaving some $ on the table but that's only in the case that we mutually agree to renew. If the tenant wasn't good, or if the price was too bad deal for me I don't have to continue.
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In the Australian rental market, I have made some lower-than-asking-rent offers as a prospective tenant. In one case, the landlord made a counteroffer that was lower than the asking rent, but higher than what I offered. I turned it down. In other cases, my lower offer was just turned down.
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The last place I rented I offered a check for 6 months' rent paid in full in exchange for a $50/mo reduction in rent. Not a huge discount, but it was something, and I didn't want to push it to $100 off since it was already a cheap place. The landlord accepted instantly.
For a more expensive place in the $1000+ range, you might be able to got more chopped off. Depends on the landlord of course, but something to consider!
We are likely to be in the $3000 range! (And no, these aren't high end properties. It's just an expensive area--DC metro--and we want an commute that DH can make by bike most days.)
I would definitely be willing to pre-pay for 6 months though. No problem. And I'd probably be willing to sign a long lease, but with military renteres (which we are) that's not always of tremendous value because we can legally break a lease if/when receiving orders out of the area. So a three year lease means we have to stay for three years... unless he gets orders.
Obviously a landlord can't legally discriminate against a military family who might well break the lease before the end date, but it's hard to imagine a landlord wanting to provide much of a discount in this circumstance. Like anything, it can't hurt to ask.
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I believe that the landlord has the right to decide weather to stick to his price or change it.
And in my opinion he shouldn't change it. You came there to live for a set price, not buy a used car, its not something you debate a price for.
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The last place I rented I offered a check for 6 months' rent paid in full in exchange for a $50/mo reduction in rent. Not a huge discount, but it was something, and I didn't want to push it to $100 off since it was already a cheap place. The landlord accepted instantly.
For a more expensive place in the $1000+ range, you might be able to got more chopped off. Depends on the landlord of course, but something to consider!
Just FYI, most older/experienced landlords I’ve met equate prepaid rent with meth/grow houses, particularly in mid-lower prices rentals. The drug dealers don’t want the landlord coming around the place to collect, so they prepay.
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I believe that the landlord has the right to decide weather to stick to his price or change it.
And in my opinion he shouldn't change it. You came there to live for a set price, not buy a used car, its not something you debate a price for.
EVERYTHING in life is negotiable. whether or not an individual is willing to negotiate depends on the person and circumstances.
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I believe that the landlord has the right to decide weather to stick to his price or change it.
And in my opinion he shouldn't change it. You came there to live for a set price, not buy a used car, its not something you debate a price for.
EVERYTHING in life is negotiable. whether or not an individual is willing to negotiate depends on the person and circumstances.
Right. The problem is that most renters don't have a whole lot to bring to the table. Prepaying rent isn't really a value-add for a landlord, and if you're in a mid-size city, a good rental record isn't really that unusual in the current market. I think that just about the only reasons I'd reduce rent are if a tenant wanted to maintain the lawn themselves with their own lawn equipment or if they were a licensed and insured contractor and I needed work done to the house.
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I believe that the landlord has the right to decide weather to stick to his price or change it.
And in my opinion he shouldn't change it. You came there to live for a set price, not buy a used car, its not something you debate a price for.
EVERYTHING in life is negotiable. whether or not an individual is willing to negotiate depends on the person and circumstances.
Right. The problem is that most renters don't have a whole lot to bring to the table. Prepaying rent isn't really a value-add for a landlord, and if you're in a mid-size city, a good rental record isn't really that unusual in the current market. I think that just about the only reasons I'd reduce rent are if a tenant wanted to maintain the lawn themselves with their own lawn equipment or if they were a licensed and insured contractor and I needed work done to the house.
What if your place had been listed for 2 weeks without any real interest? Or three, or four? I know that as a landlord, after about 2 weeks, I'd be seriously considering a price drop, so if someone came in close to that time and offered $100 less, I'd take it. (I own in a crazy expensive market where a modest townhouse gets almost $3k in rent, so $100 is pretty small % and is made up in basically 2 days less vacancy.) If it's been 5 days, I probably wouldn't consider it, but at 10 I would give an offer some thought and at 14 I'd almost certainly take it.
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I believe that the landlord has the right to decide weather to stick to his price or change it.
And in my opinion he shouldn't change it. You came there to live for a set price, not buy a used car, its not something you debate a price for.
EVERYTHING in life is negotiable. whether or not an individual is willing to negotiate depends on the person and circumstances.
Right. The problem is that most renters don't have a whole lot to bring to the table. Prepaying rent isn't really a value-add for a landlord, and if you're in a mid-size city, a good rental record isn't really that unusual in the current market. I think that just about the only reasons I'd reduce rent are if a tenant wanted to maintain the lawn themselves with their own lawn equipment or if they were a licensed and insured contractor and I needed work done to the house.
What if your place had been listed for 2 weeks without any real interest? Or three, or four? I know that as a landlord, after about 2 weeks, I'd be seriously considering a price drop, so if someone came in close to that time and offered $100 less, I'd take it. (I own in a crazy expensive market where a modest townhouse gets almost $3k in rent, so $100 is pretty small % and is made up in basically 2 days less vacancy.) If it's been 5 days, I probably wouldn't consider it, but at 10 I would give an offer some thought and at 14 I'd almost certainly take it.
Me personally? If it were me and I was considering dropping the price anyways, I'd probably make you fill out an app and drop the price $100 to see if I get other interested renters.
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I tend to have premium units and as such tend to attract younger college educated tenants. I tend to price at a premium to the market and have taken a small reduction if they are well qualified and appear to be good tenants.
I've also reduced rent for a longer term tenant who has voiced interest in saving for their future so I'm willing to help them out with that.
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As a renter, I've pretty much always attempted to negotiate my rent. Most of the time I have paid less than the asking price.
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we have given several rent discounts as landlords on SFH and condo properties. it is much more valuable to us to get someone in than the squeeze out every last cent (both from a pure $ standpoint and a time/effort standpoint)
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I try to negotiate rent if it's with a direct landlord or property management company and it seems the place is priced high. This only worked once and a month in my landlord put it up for short sale. Apparently the $100 discount she offered made it so the rent she was charging didn't even cover the mortgage + HOA. So good for me on negotiating but bad for me overall since unit was forced to sale.
Always look up the last sale date and sale price of a rental you're looking at. The landlord could have the prices set based on what they owe on the property if they became a landlord unintentionally. I'd also look up the landlord (not just the management company!) online for their linkedin or occupation. Hindsight is 20/20, but we could have avoided a really messy situation.
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My landlord has mentioned a couple of times that everything is negotiable.
I felt our price was fair and did not negotiate. Our upstairs neighbors did negotiate -- this year, their rent is going up and mine is not. :P
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As a property manager for two large corporations, I've always held firm on no rate negotiations due to Fair Housing principles. I would hate to open myself or my property up to liability due to offering different rates to different people. Independent owner/managers can get away with it more easily but if you manage property on a large scale, it would be tough to offer one person X amount off the published rate unless you were willing to offer every person you talk to the same rate after that. All it takes is one person saying "you offered someone else a lower price than me because I'm [member of protected class]" and you're in a tough situation and getting secret shopped by auditors.
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As a property manager for two large corporations, I've always held firm on no rate negotiations due to Fair Housing principles. I would hate to open myself or my property up to liability due to offering different rates to different people. Independent owner/managers can get away with it more easily but if you manage property on a large scale, it would be tough to offer one person X amount off the published rate unless you were willing to offer every person you talk to the same rate after that. All it takes is one person saying "you offered someone else a lower price than me because I'm [member of protected class]" and you're in a tough situation and getting secret shopped by auditors.
It seems like this could be mitigated (if you wanted to, but it sounds like there's no need so I'm speaking theoretically) by having a policy. "I/we don't negotiate on rent prices unless the place has been vacant and listed for two weeks. At two weeks, for someone willing to sign an 18 mo. lease and whose credit score is 710+, if and only if requested, we will negotiate up to $100 [or 2%, or whatever] off, but first with a counter offer of half their proposed reduction (up to $100). After 3 weeks, we will go up to $150 [or 3%, or...], with the same counteroffer rule." Or whatever terms make sense. But codifying it removes any reasonable perception of inequity or bias.
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That's a lot of policy to accommodate something most landlords don't want to do. I think most landlords focus that energy on just setting the right price and listing it. (As a landlord of just my house, renting out rooms, I don't recall getting price offers, but tenants often have cash flow requests, so that's what I negotiate. My experience supports the remark upthread that I avoid rent raises on good tenants, though.)
That said, good luck in finding your new dwelling!
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I have successfully negotiated rent (i don’t normally negotiate anything). It was a house for rent that had been on the market for $2700 for a little while, they had dropped the price to $2300. I offered $2150 for 18 mon lease and they accepted it. The only reason i made an offer lower was because it was already more than i was willing to pay and i didn’t really need to move. It turned out to be a pain in the butt landlord in the very end.
I will make an offer next time i decide to rent unless it is a place i really want and is prices fairly. You negotiate when buying a house so why not when renting?
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Most people have already said what I would say, but the short answer is "no". If I wanted to accept less rent, then I'd lower the rent and put it back on the market and see what kind of people I'd get. Lowering it for you means not only that I can't get someone equally good at the current rate, but not even at the reduced rate. If it comes down to this, then I haven't priced it right to begin with.
I can however definitely see a case where I'd accept an offer for less:
"Hi, we really love your place and would like to rent it long-term. We have perfect credit, perfect rental history, and three times the minimum income needed. We will take superior care of your place and never bug you over the little things, and if there are any big things, we'll let you know about them immediately and work with you closely to resolve them. We will never be late with the rent. Never. Also, we will build a new deck off the back porch at our expense. You're asking $1800 a month; would you be willing to accept $1700 for a 3-year lease?"
That I might consider. Turns out it's never really happened. People who try to negotiate are usually marginal renters who aren't offering anything in exchange for reducing my margins by a hefty amount.
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Most people have already said what I would say, but the short answer is "no". If I wanted to accept less rent, then I'd lower the rent and put it back on the market and see what kind of people I'd get. Lowering it for you means not only that I can't get someone equally good at the current rate, but not even at the reduced rate. If it comes down to this, then I haven't priced it right to begin with.
I can however definitely see a case where I'd accept an offer for less:
"Hi, we really love your place and would like to rent it long-term. We have perfect credit, perfect rental history, and three times the minimum income needed. We will take superior care of your place and never bug you over the little things, and if there are any big things, we'll let you know about them immediately and work with you closely to resolve them. We will never be late with the rent. Never. Also, we will build a new deck off the back porch at our expense. You're asking $1800 a month; would you be willing to accept $1700 for a 3-year lease?"
That I might consider. Turns out it's never really happened. People who try to negotiate are usually marginal renters who aren't offering anything in exchange for reducing my margins by a hefty amount.
I didn't exactly word it that way but in my situation as the renter, the owner had already overpriced ($2700) and lowered ($2300) and was still overpriced. The way I saw it (and I assume he saw it the same way), he could have waited another 1-2 months at the higher rent before potentially reducing rent again which would have been more losses for him. I didn't negotiate because I was a marginal renter, I negotiated because it was overpriced. In hindsight, I wish he didn't accept it because he turned out to be an awful landlord overall.
I think you are underestimating how much people think their stuff is so much more valuable than the others around them.
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For the first time in a zillion years, we are going to be in the US rental market very soon. I'm doing a lot of scouting now to get an idea for areas where we can get at least most of what we want for our budget. I'm checking out Zillow, Hotpads, etc.
What I'm wondering is whether most landlords (for private rentals And large complexes) generally expect to get asking or if the listed rents are starting point for at least a little negotiation. As a landlord, we've always gotten asking, but truthfully we'd have taken less and told our PM that. Just trying to figure out what is typically so I know whether the places that are only a bit over budget might still be worth at least looking at.
(To be clear, we don't move until February so I'm not looking at specific places yet. Just narrowing neighborhoods around which we will focus our eventual search.)
I own two rental properties, and personally I've only ever had one person negotiate rent. He was willing to sign a two year lease if I dropped the rent down by $50. I of course took his offer, but I was surprised that he didn't ask for more of a discount. I probably would have given it to him.
In my experience, most people tend to avoid conflict, so they don't negotiate. Which is a shock to me, because if I'm signing any type of contract, I always at least ask if the person on the other end will drop the price. After all, the worst answer I've ever heard is no.
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I've successfully negotiated lower-than-advertised rent. If you present yourself as a dream tenant (which I am!) they might be willing to lower the price. A responsible, clean, quiet tenant is valuable to a landlord.
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In support of my prior assertion and experience succesfully negotiating rent, I have another two anecdotes from this weekend.
I looked at 2 new rental units both shown to me by listing agents. In one case, the condo unit did not have any form of A/C but being right by the beach its probably not necessary. Nonetheless, no AC should warrant a discount over comparable comps. The offering price (rent) did not seem to embody such a discount. I let the agent know this and told her that if the unit reflected such a discount over local comps due to no AC, I might be interested. I received a call the next day from the agent telling me the owner had a new and lower price. In this case, succesful negotiation required walking away, nothing more nothing less.
In the second case, I told the listing agent that the unit was being offered at fair market value only if it was in excellent condition. Due to many features inside the unit being worn down/out it would require a significant rehab to warrant the current price. I told the agent, that I might be interested if the owner offered a discount on the current price due to the obvious problems. The agent agreed with me and was going to pass on the info to the owner. He also stated other prospective tenants said the same thing.
Moral of the story is that FMV (fair market value) is always a negotiable range with wiggle room.
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Since I have returned to being a "renter" -in the last 3 years I have negotiated a $100/mo discount from their asking price on two separate units. Both times by offering to play the entire year in advance. This seemed to keep all parties happy.
I agree with others in this thread who say "everything is negotiable"