Negotiating your lease renewal can be an opportunity to improve the rental terms proposed to you. Here are some tips to help you navigate the negotiation process effectively:
Research comparable rental rates
Start by researching current rental rates for similar properties in your area. This information will provide you with valuable leverage when negotiating with your landlord, especially if you find that the proposed rent increase is higher than market averages. Remember, apartment units have many factors that dictate the price, the building itself plays a large role in the premium you pay!
Consider the following and how each factor impacts rental pricing from the landlord’s perspective:
- Location: Buildings within the same neighborhood or vicinity often share similar amenities, accessibility to public transportation, proximity to schools or workplaces, and overall desirability, making them comparable in terms of location.
- Property type and size: Buildings with similar property types (apartments, condos, townhouses) and sizes (studio, one-bedroom, two-bedroom) offer a more accurate basis for comparison as tenants typically seek similar living spaces. If you live in a building that only offers studios and one-bedrooms, comparing prices to a building that also has two-bedrooms, three-bedrooms, and penthouses may not be the best property to compare.
- Age and condition: Buildings constructed around the same time and maintained to similar standards provide a fair comparison, as they likely offer comparable features, aesthetics, and maintenance levels. The newer the building, usually the more leverage the landlord has in price command.
- Amenities and facilities: Buildings offering similar amenities such as gyms, pools, parking facilities, security systems, and communal spaces cater to similar tenant preferences, making them comparable in terms of added value.
- Management and services: Buildings managed by the same company or offering similar levels of service (24/7 maintenance, concierge services) provide a basis for comparison in terms of tenant experience and satisfaction.
- Market demand and trends: Buildings experiencing similar demand levels, vacancy rates, and rental trends within the local market offer relevant comparisons, reflecting current market conditions and rental pricing dynamics.
The closer your apartment aligns with the comparison, the easier it is to gauge the fairness of the proposed lease renewal. This helps negotiate better terms with landlords for a favorable outcome. When conducting comparison research, your aim is to demonstrate to the landlord that similar properties in the same market are offering more favorable rates.
Look at apartment pricing in your building
PRO TIP: Sometimes looking within your building is an even better way to gain leverage in your negotiation. Sure, a competitor complex is pricing at a certain amount, but telling a landlord you know what’s going on within the building is powerful.
How do you do this?
You live in a one-bedroom and your initial rent upon move-in was $2,550. Then, your renewal comes and you’re offered a new rental rate of $2,703 (not crazy, only a 6% increase). Now think about your unit, what are the built in premiums to the pricing – location in the building (top floor?), view, size/floorplan, high ceilings?
Go on your property’s website and look at exact floorplans to see the current pricing. Do your best to figure out if the unit has similar premiums as discussed above. If you find a one-bedroom available that is very similar to your unit and it is on the market for $2,605 – now you have some leverage. This method does not guarantee you will be able to secure the exact rate as the available unit, but you can definitely make a solid attempt to reduce your initial offer!
Identify areas of negotiation
Before approaching your landlord, identify specific aspects of the lease renewal that you would like to negotiate. It does not always have to be about the rental amount! This could include lease duration, included amenities, or any other terms that are important to you. Prioritize your negotiation points based on their significance to your living situation.
For example, maybe you’re fine with all the terms, but you’ve lived in your apartment for a few years and desperately want a new carpet – ask! Remember, your landlord is interested in keeping you, it does not mean you have all the power, but you certainly have enough.
Make sure you get everything in writing
Getting everything in writing during lease renewal negotiations is crucial for several reasons. Firstly, written agreements provide clarity and prevent misunderstandings between tenants and landlords regarding the terms and conditions of the lease. Secondly, a written document serves as a legally binding contract, offering protection to both parties in case of disputes or disagreements in the future.
It also ensures that all negotiated terms, such as rent adjustments, lease duration, or included amenities, are accurately recorded and honored throughout the tenancy. Lastly, having a written record allows tenants to reference specific agreements and hold landlords accountable to their promises.
negotiate with confidence
In conclusion, negotiating a lease renewal offer is a strategic opportunity for tenants to assert their needs and preferences in the rental agreement. By engaging in open and constructive dialogue with landlords, tenants can potentially secure favorable terms that align with their budget and lifestyle.
Taking the time to thoroughly review the lease terms, seek clarification on any ambiguities, and document all negotiated changes provides clarity and accountability throughout the tenancy. Ultimately, negotiation empowers tenants to cultivate a mutually beneficial relationship with their landlord while ensuring a positive living experience in their rented space!