Author Topic: Any tips for rent negotiation with a new property owner?  (Read 2601 times)

Padonak

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Any tips for rent negotiation with a new property owner?
« on: May 07, 2017, 02:10:38 PM »
My landlord is selling the house. I've been renting one of the apartments in this house for a few years. The current lease is month to month. We didn't sign a new lease this year, just a verbal agreement that I'll keep paying month to month and either party can terminate the lease at a one month notice.

I am a good tenant, always pay on time and never make any trouble. I think my current rent is about $200-300 below market rate based on comparable offers I see on Zillow and Trulia in the neighborhood.

The landlord is selling at a high price. He has warned me that a new owner, if they decide to keep renting this apartment, is likely to increase the rent based on the comments he heard from many potential buyers about the current rent being "so low".

When the sale goes through, what can I do to (1) get the lowest possible rent and (2) keep the month to month arrangement?

I can find another place if need be. There are several comparable apartments available in the same area for about 2-3 hundred more, also some smaller/worse apartments available for the price I'm currently paying. I'd rather stay in the same place, though.

This is a popular neighborhood in a HCOL area. As per local tenant-friendly rules, I get minimum 30 days notice even if there is no official contract. Also, if the rent increase in "unconscionable", meaning much higher than the market rent, intended to get rid of the tenant, I can dispute that in theory, though in practice I don't want to get involved in a legal dispute.

The only thing I can think of now is to compile a list of comparable offers in the area and present it to a new owner if they demand unreasonable rent. Also, I can point out that I am a good tenant and always pay on time, so even if they don't charge the highest rent they can possibly get, they won't lose money renovation, keeping the apartment vacant for let's say a month, potential issues with bad tenants, etc.

Another question is about security deposit which is 1.5X monthly rent and kept in an escrow with a bank. If I decide to move out, what can I do in advance to keep as much of it as possible? I didn't take pictures when I moved in a few years back. The apartment was freshly renovated. Now, there are no major issues other than normal wear and tear. However, I year or two ago I had cockroaches which then disappeared, but there may still be traces of them behind the fridge, kitchen counters etc. Also, new owners may argue that what I think is normal wear and tear is actually damage and has to be taken out from deposit (small scratches on wooden floor, kitchen cabinets, etc).

Any advice is highly appreciated.

tralfamadorian

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Re: Any tips for rent negotiation with a new property owner?
« Reply #1 on: May 07, 2017, 03:04:34 PM »
When the sale goes through, what can I do to (1) get the lowest possible rent and (2) keep the month to month arrangement?

There is a good chance that the new owner(s) will want a 12 month lease and market rent.  Don't be surprised if a month to month rental agreement comes with a ~10% higher rent than the 12 month lease.  In the meantime, you can keep the apartment as neat and clean as possible, be accommodating to any walkthroughs they request before or after closing, answer any texts or emails in a friendly and timely fashion and ask the seller to let the buyer know that they will give you a recommendation as a great tenant and that you would prefer to stay, rent price permitting. 

The only thing I can think of now is to compile a list of comparable offers in the area and present it to a new owner if they demand unreasonable rent.

Most landlords will not negotiate.  You can try but chances are they will tell you that you are welcome to move to one of the less expensive properties that you find to be comparable.  Particularly if the neighborhood is popular as you mentioned and it would an easy vacancy for the landlord to fill.

Another question is about security deposit which is 1.5X monthly rent and kept in an escrow with a bank. If I decide to move out, what can I do in advance to keep as much of it as possible? I didn't take pictures when I moved in a few years back.

Lack of pictures and documentation work to your benefit.  Did the previous landlord do a detailed move-in inspection with you with pictures?  If they did not or if they do not provide that information to the new owner at closing, then you would be most probably keeping your whole deposit as there would be no proof that the damage was not pre-existing. 

Padonak

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Re: Any tips for rent negotiation with a new property owner?
« Reply #2 on: May 07, 2017, 03:13:05 PM »
Thanks, yes, I'll start viewing new apartments just in case. You are right that the new owner will probably not negotiate. The only argument I have is for them to avoid (short) vacancy and renovation expenses + lower risk because I pay rent on time and previous landlord can confirm it (I will ask him to provide reference either to new owner or another landlord, good idea).

About photo evidence: no, the current owner didn't take any pictures (that he showed me or documented). There were no documents about existing issues with apartment, move in inspection etc, that i had to sign. So yes, i think this may work in my favor.

I'll read the local tenant/landlord rules once again just in case, including rules regarding keeping security deposit.

Padonak

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Re: Any tips for rent negotiation with a new property owner?
« Reply #3 on: May 07, 2017, 03:30:15 PM »
Another question is about cleaning. If i don't clean the apartment before I move out, what is a reasonable amount of deposit that can be taken out for cleaning? I don't mind cleaning it, of course, but end of tenancy cleaning has to be more thorough / done professionally, so I would rather just pay for it out of deposit than move the kitchen stove, fridge, etc. to clean behind them. Is it a good idea to just agree with a new owner that they take let's say $200 from my deposit and hire somebody to clean it?

checkedoutat39

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Re: Any tips for rent negotiation with a new property owner?
« Reply #4 on: May 08, 2017, 09:45:24 AM »
Yeah, this is one thing that sucks about renting and it has happened to me a couple times.

It sounds like the sale hasn't occurred yet. The good news about this is it may take a long time to sell and the new owner has to honor the leasehold regarding notice period law. (Read up on it now if you haven't -- in some places the effective notice period is longer than 30 days.) The bad news is the new owner may want you out in order to renovate or live there, and there's nothing you can do about it. In any event the new LL won't know you the way the old LL does and lots of people are good tenants. You are a "new tenant" to a new owner.

Get into the mindset that you may be moving in a few months so start to get a feel for what kinds of units are renting for how much. Get around, maybe even look at one or two places. The more you are ready for it, the less jarring it will be when that happens. It may end up being a positive -- one time I had to do it I ended up moving into a better neighborhood, closer to downtown and to work; the second time I found a larger condo in the same building. Higher rent in both cases but I though it was worth the trade-off.

Don't force the issue. As I've said in other posts, inertia is your friend. Let the new LL come to you.

Regarding your security deposit, when you move out ask for a walkthrough and take pictures. Usually the LL has to document any reduction in the deposit, such as with pictures of his own or a cleaning bill over and above typical turnover expenses. If that is not explicitly the law, as it is in Chicago, a judge will still usually want more evidence than "it was really dirty". Sounds like you'll be staying in the same area, so you can take him to small claims if necessary.

rothwem

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Re: Any tips for rent negotiation with a new property owner?
« Reply #5 on: May 08, 2017, 11:35:39 AM »
I hate to be the bearer of bad news, but if I was buying a new place with a mtm tenant installed that was paying below market rent, I'd aim to have you out ASAP. 

-You have no lease, so you're easy to kick out.
-You're paying under market value, so you're actively costing money.
-The new owner did not screen you, so there's a possibility you're a deadbeat (not saying you are, but without screening, how would they know?)

I would expect to move out, start looking for new places now. 

NoNonsenseLandlord

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Re: Any tips for rent negotiation with a new property owner?
« Reply #6 on: May 10, 2017, 09:43:44 AM »
Another question is about cleaning. If i don't clean the apartment before I move out, what is a reasonable amount of deposit that can be taken out for cleaning? I don't mind cleaning it, of course, but end of tenancy cleaning has to be more thorough / done professionally, so I would rather just pay for it out of deposit than move the kitchen stove, fridge, etc. to clean behind them. Is it a good idea to just agree with a new owner that they take let's say $200 from my deposit and hire somebody to clean it?

Fat chance I am accepting $200 to clean the unit.  I charge $40 per hour, and you would likely be billed in excess of $500.

Hire a professional cleaner for at least 8 man hours.  That will help.

Cwadda

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Re: Any tips for rent negotiation with a new property owner?
« Reply #7 on: May 10, 2017, 10:05:15 AM »
I am currently on the reverse side of this situation - acquiring an apartment building where the tenants have been there for 3 years and have been great tenants, but the rent is under market by $50-100 for each unit. I see no reason to raise rent on the tenants because they have been so good. Good tenants always supersede the extra cash, to me.

Padonak

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Re: Any tips for rent negotiation with a new property owner?
« Reply #8 on: May 10, 2017, 07:21:48 PM »
Another question is about cleaning. If i don't clean the apartment before I move out, what is a reasonable amount of deposit that can be taken out for cleaning? I don't mind cleaning it, of course, but end of tenancy cleaning has to be more thorough / done professionally, so I would rather just pay for it out of deposit than move the kitchen stove, fridge, etc. to clean behind them. Is it a good idea to just agree with a new owner that they take let's say $200 from my deposit and hire somebody to clean it?

Fat chance I am accepting $200 to clean the unit.  I charge $40 per hour, and you would likely be billed in excess of $500.

Hire a professional cleaner for at least 8 man hours.  That will help.

I'm fine paying for a professional cleaner. If it was my current landlord, I would just ask him what he would prefer: me hiring a cleaner or paying the landlord to do so? The problem with a new owner (whoever it may be) is that I don't know them and therefore can't trust them. What if I pay let's say $300 for professional cleaner and than a new owner still tries to screw me with the deposit?

clarkfan1979

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Re: Any tips for rent negotiation with a new property owner?
« Reply #9 on: May 10, 2017, 09:28:23 PM »
Remind the landlord that he/she really likes you as a tenant. Remind them of all the nice things you have done.

If you don't have any leverage, it's not really negotiating.

rothwem

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Re: Any tips for rent negotiation with a new property owner?
« Reply #10 on: May 11, 2017, 06:52:06 AM »
I am currently on the reverse side of this situation - acquiring an apartment building where the tenants have been there for 3 years and have been great tenants, but the rent is under market by $50-100 for each unit. I see no reason to raise rent on the tenants because they have been so good. Good tenants always supersede the extra cash, to me.

But if you haven't been collecting rent from them, how do you know they're good tenants? The previous owner could've falsified all of the records.

Fishindude

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Re: Any tips for rent negotiation with a new property owner?
« Reply #11 on: May 11, 2017, 07:01:55 AM »
I was able to lock in the price on some property I lease by agreeing to a five year lease.
This may not suit everyone, but I was happy with it.

Cwadda

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Re: Any tips for rent negotiation with a new property owner?
« Reply #12 on: May 11, 2017, 08:58:49 AM »
I am currently on the reverse side of this situation - acquiring an apartment building where the tenants have been there for 3 years and have been great tenants, but the rent is under market by $50-100 for each unit. I see no reason to raise rent on the tenants because they have been so good. Good tenants always supersede the extra cash, to me.

But if you haven't been collecting rent from them, how do you know they're good tenants? The previous owner could've falsified all of the records.

Because I've spoken with all of them personally, not just the seller/current landlord.

rothwem

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Re: Any tips for rent negotiation with a new property owner?
« Reply #13 on: May 11, 2017, 03:46:48 PM »
I am currently on the reverse side of this situation - acquiring an apartment building where the tenants have been there for 3 years and have been great tenants, but the rent is under market by $50-100 for each unit. I see no reason to raise rent on the tenants because they have been so good. Good tenants always supersede the extra cash, to me.

But if you haven't been collecting rent from them, how do you know they're good tenants? The previous owner could've falsified all of the records.

Because I've spoken with all of them personally, not just the seller/current landlord.

The tenants themselves have even more incentive than the property owner to lie to you about paying/paying on time because they don't want get kicked out and they don't want you to try to collect.

Have you done a background check on them? What's their credit like? How's their eviction history? Do they have a criminal record? If so, what is it for?