How to Negotiate Rent Part 2

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Following my last post on negotiating rent on a new place, here’s how you negotiate rent on your existing place:

Do you pay rent on time? Take good care of your rental? Don’t nitpick on every light bulb that needs to be changed and bombard your landlord with endless demands?

Congrats! You’re a dream tenant. 

Just like employers who value existing employees that they trust, rather than take on new, untested employees that they need to train, landlords value existing trustworthy tenants. 

That’s why you’re more likely to get a discount from your existing landlord, who knows and trusts you, because they don’t want to take on the risk of a new tenant who might destroy their property or stiff them on rent.  

Use this to your advantage.

If you’re using AirBnb and the place is available long term, once your stay is over, you can negotiate a rental deal directly with the landlord. This will save both parties the Airbnb fees. Plus, you already know and trust each other so you don’t need the security of AirBnb holding the money in escrow anymore. This allows you to negotiate a lower rent since they are getting the money directly. But make sure you have a rental agreement signed and spell out exactly what is covered in the rent so there are no misunderstandings. Since AirBnb includes all utilities, furniture, and Wifi, don’t get complacent thinking you’ll get the same deal. You need to explicitly state it when you negotiate. Also, make sure you get the landlord’s contact information before you check out of the AirBnb, or it’ll be gone. 

If you’re on a long term lease, the best time to negotiate with your landlord is winter. You’ll have less competition since it’s harder for your landlord to rent it out during those months. But don’t do it too early or too late, since most leases require 30–60 day notice to terminate.

Here’s how to go about negotiating your existing rental:

Pros and Cons List

The first thing you should do is sit down and make a pros and cons list about your current rental.

For example:

Pros:

  • Fantastic location. Walking distance to everything.
  • High ceilings and great layout.
  • Indoor parking (more valuable in winter)
  • Easy going landlord. Reverse-agism is an advantage here. I’ve found that older landlords (55+) who don’t need the money and are just renting out their 2nd property or part of their house for extra income are the ideal landlords. They are willing to give a discount to trustworthy tenants because they don’t want the headaches of dealing with high maintenance people. To them time is worth more than money.

Cons:

  • Laundry is in the building rather than en-suite
  • Doesn’t have a dishwasher

Keep this list, as you can use the pros to compliment your landlord and the cons to negotiate a discount (we’ll get to the exact script of how to do this later)

Next, search for comparables.

Find Comparables

Make a list of 5-10 rentals that match your criteria and have lower rent than your current place. You can also include bigger places with higher rent.

 

Here’s a list of sites we use:

US and international:

1. Zillow.com

 

2. Padmapper.com

 

3. Zumper.com

 

4. Facebook Marketplace

 

6. Craigslist

 

Canada

1. Zolo.ca (Canadian equivalent of Zillow)

This site is an incredible resource for renters and it’s easy to use. You can put in the # of bedrooms you want, min-max rent, home type (condo, townhouse, house) and see the results in map view (look at all the rentals available in Toronto for under $1700/month!).  Click on a green dot to see each rental in more detail and then “full listing” if you want to know more. 

 

I also love how they show you the exact address, size, and what’s included (furnished, parking, utilities, etc) in detail. You can also see how long the listing has been up for and how much it’s dropped:

Rental price dropped $100/month after no takers at $1750 after 56 days on the market.

 

This rental doesn’t include hydro, parking, or water. So you will need to add $75-100/month to the rental price. Plus another $150-200/month for parking downtown if you have a car.

 

You can also scroll down and see how much other same-sized units in the building are renting for:

Nice! You’re getting the best rent for this type of unit in the whole building 

Also, you can see how much a place like this sells for (so you can calculate the cap rate and thank your landlord for subsidizing your rent):

 

For a $600K+ condo, Zolo estimates the mortgage to be around $2319/month + $376.54 condo fees, so that’s $2695.54/month already even before property taxes and insurance!  You’re getting it for $1650. That’s a steal! Give your landlord a hug for subsidizing $1045.54+/month of your monthly expenses!

 

Two downsides to Zolo are that you can’t exclude basement rentals or shared places looking for a roommate. Also, you need to sign up with your e-mail to get access to see all the pictures of the listings. I used an e-mail address I don’t use often and haven’t been spammed so far.

2. Viewit.ca

This site finds rentals with the best value. It’s not the prettiest and isn’t as easy to use as Zolo but it has a good mixture of purpose-built rental apartments and duplex/triplex houses. This is the site where we found our $850/month rental back in 2006. I also like the fact that there’s an option to exclude basement suites. Landlords who list on here also have to pay a fee, so it’s good for weeding out the scammers.

3. Kijiji.ca

This one kinda feels like digging around in the bottom of the discount bin at the thrift-store. Not a lot of bells and whistles and not easy to use, BUT sometimes you can find some real gems (it might just take you a while to find it). Especially if you want something month-to-month or a 2-6 month sublet. You can also find a 1 year lease, like this place for only $1300/month utilities included. Even if you don’t plan on taking the rental, you can use it as a comparable when negotiating with your landlord. 

 

 

Offer to Help Your Landlord

If you know your landlord has additional empty units and you have friends or family also looking for rentals, you can sweeten the pot by giving them referrals. That way they’re more incentivized to give you a discount as a “finder’s fee.” If you’re a good tenant, it’ll also be easier for your landlord to trust your referrals, so you could end up getting your friends/family a discount too.

Now that you have your pros & cons list, comparable rentals list, and possibly some referrals, it’s time to negotiate.

Here’s the script we used to negotiate $1700/month rent (utilities, wifi, and parking included) for a place that normally rents for $2000+/month:

“Dear <landlord’s name>,

I’m planning to extend my stay in [city: Toronto]. Your place is great in terms of [pro #1: location] and [pro #2: all the little thoughtful touches that make it super comfortable]. Thanks for being a great landlord.

While looking at different rentals in [city: Toronto], here’s what I’ve found:

1) Comparable #1 
2) Comparable #2
3) Comparable #3

The advantages of these other places are that they have [con#1: dishwashers] and [con#2: en-suite laundry]. The laundry in this building here is all right but I prefer the convenience of not having to leave the unit. That being said, I really like [pro #1: this location]. Would you consider giving me a [$300/month] discount to stay? I’d be happy to pay [$1700/month all inclusive]. I can pay in advance so you can get the rent money right away. Would that work for you?”

Feel free to use this script and do a find and replace of what’s in the square brackets with your particular situation.

Now, you might be wondering how much of a discount you should ask for.

Generally, you’ll want to start with a lower number than what you think you can get, but not so low that it’s insulting. 20-25% is a good place to start so you they can come back to you and you can meet somewhere in the middle, closer to your real target. If you’re a good tenant, they’ll be incentivized to keep you with a discount rather than risk finding a new unknown tenant.

In my case, the 3rd comparable was a bigger, two-bedroom place that was more expensive ($1800) and the 1st comparable is a smaller place that isn’t furnished ($1400), so I took the average ($1800 +$1400)/2 = $1600 and then added $100 for utilities, parking, and wifi, to get $1700. I could’ve low-balled at $1500 but I felt $1700 was reasonable, given the great location (you can save $100-$200 on gas or public transit if the place has a great walking score) and the responsive landlord. Going forward, another thing I could do is offer $1500-$1600/month rent paid upfront for 3-4 months if they’re willing to lower the rent even more for the stability of having a low maintenance, trustworthy, longer-term renter.

Using this script and finding comparables on Zolo, our friends were also able to negotiate $300/month off their Toronto rent when renewing their one-year lease!

Give it a try. In a renter’s market, you have nothing to lose. Just remember, don’t bluff. You need to be flexible and actually be OK with moving if your landlord says no because if they play hardball and you cave, they will know you’re full of crap going forward. If you give the sense that you’re not actually willing to move out of convenience, you lose your negotiating power.

Have you ever been able to negotiate a lower rent? What are your tips?


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17 thoughts on “How to Negotiate Rent Part 2”

  1. I’m curious about turning a nightly vacation rental into a long term rental. When I was looking at places for sale in Steamboat Springs, the overhead for rentals was nearly 50% – that is, if a place is listed at $300/night, after paying the listing and transaction fees, cleaning, and maintenance, they’re only getting about $150. On top of that, since it’s a nightly rental in a seasonal destination, they’re lucky to fill it 50% of nights through the year, netting them an annual monthly average of $2200/month. That’s a lot less than the book price of $9000!

    I guess you never stay in one place to negotiate an annual lease on a place, but I wonder if you could realistically negotiate that kind of monthly rate on a place like that.

    1. That’s a good idea. Give it a try and see? Like you said, I don’t do 1 year leases so the situation has never come up.

  2. I have saved thousands of dollars negotiating rent with my existing landlord at points in the past. Of course, a lot of it does depend on how hot the market is, but sometimes you can save a couple of hundred dollars a month. In particular you can get them to not implement a rent raise that they would otherwise have done automatically after the first year of renting with them.

  3. Thanks for this – although it’s not relevant to me right now (I own, which probably isn’t financially optimal, but I’m very attached to my place!), I’m going to bookmark it for when I become FI and nomadic. Scripts like this are exactly what people who aren’t very experienced at negotiating need – I once took a negotiating course at work, it was so uselessly vague that I literally walked out, the so-called negotiating expert teaching the course couldn’t talk me out of doing so!

    1. Are you sure he wasn’t helping you out the door instead? That’s part of the negotiation. When you can’t negotiate, move on to the next potential person to negotiate with and stop wasting your time with the prior one. 🤣

  4. nice tips. though the idea that any value of mortgage payment over rent is a subsidy to you is a wrong way to think about those cashflows. viewing annual rent as % of home value a more useful measure

    1. You are incorrect. Cashflow is king. Repeat after me. Cashflow is king. I don’t care what the value of the house is as a renter. It’s not mine. That’s so silly.

      Again. Cashflow is king. Nothing is more important financially. Nothing.

      When you have actual cashflow, you’ll have a better understanding of what I’m talking about hopefully.

      1. You’re mistaken on what the point is. Value of the house consideration is about value, not about whether cash flow is relevant . Try again .. and with less of a need to make projections on others to make yourself feel better

        1. I used to be a homeowner. I no longer am, by choice. As I’ve had experience on both ends, I can tell you unequivocally, cashflow is where it’s at. Being a homeboner has its limitations.

          One day, the epiphany of cashflow will hit you squarely between the eyes and you’ll come to the realization, holy shit, he was absolutely right. No thanks required when the time comes.

          1. this has nothing to do with whether its better to rent or buy. you’re projecting and thinking that just because something was profound to you, it will be profound to others.

          2. Why do you think I own a home or care to? Why do you think I don’t value cashflow or have any? Why do you think your idea is so insightful? Your chip on your shoulder is projecting a whole lot of assumptions that were never said and don’t apply.

  5. The same house can have different owners, putting different downpayments down or buying in cash. Obviously all their monthly cashflows will look very different. if you don’t care about the value of the home why should you care how they’re financing it? It’s irrelevant to you

  6. Being a dream tenant makes it that much easier to negotiate with. I’ve never failed to pay rent and so this past year, I negotiated a 1-time rent concession that I thought they were out of their minds to grant.

    My place’s rent is in a prime location, the rent is the lowest out of 10 other tenants, AND all my utilities are paid for. I believe that my landlords are losing money on my apartment. There’s no way that they make money from me.

    If you don’t ask though, you never get.

  7. Great follow-up post to negotiate long-term contracts! I wish site like Zillow.com or Zolo.ca could also excite for short term rental worldwide so it would be easy to know whether or not we are getting a great deal or not (we do the work by looking up other Airbnb / short term in the area, but that is a lot of work and having the information aggregated would be a time saver).

    How much of these tips related to long-term rentals do you think would apply to short-term rentals?

  8. I would not accept to negotiate a rent with a long term tenant, it drops the building’s value (to negotiate 50$/month is only 600$/year, but it means around 15,000$ less in value). I might do it if the tenant is able to offer security (endorser, security deposit, tenant home insurance, etc.) AND if it’s the kind of tenant that will leave after 2 or 3 years, knowing that I will raise the rent then. Honestly, I did accept once to drop the rent (like in : accept the offer right away with no counter offer) because she was very nice, polite and, man, those eyes… lol

  9. These are pretty solid tips, thanks, and yes, if you’ve been a great tenant for a while, you can always negotiate with your landlord. I wasn’t too familiar with these sites (the real estate site I’m using the most is tranio.com, but that’s because of my job), I’ll see what feedback I can find about them!

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