It's both a tough time and a great time to be a renter out there.
Across the country, the recession is putting the squeeze on people's pocketbooks, making every expense painful. And yet the downturn has given renters more power: Apartment vacancy rates nationwide rose to their highest level in more than three years — to more than 6% — in the third quarter of 2008, according to real-estate research firm Reis. (Third-quarter data is the latest available.)
That makes this potentially a great time to save on your rent with your next lease. And if your market has been particularly hard-hit, you may even trim your costs midlease, or score that desired parking spot or new energy-efficient fridge.
Whatever perk you're after, you need a plan. Landlords are business people and you need a solid business case for why they should sweeten your deal. In the following 15 tips, more than a half-dozen people who toil daily in the renting field help you build your case.
If you're in the middle of a lease and have just run aground on tough times — say, lost a job or taken a huge cut in hours — there's no easy way to knock down the size of that looming rent bill, experts say. After all, you signed a contract. And even some sympathetic landlords may be reluctant to give a brief cut in the rent because of possible accusations of unfair housing practices if they don't extend the same relief to others, says Katie Bencken of ApartmentRatings.com, who also manages a blog about apartment living.
The key to having any luck in reducing your rent, midlease, is communication, says Don Conrad, a property owner and author of "How to Find That Quality Tenant: The Five Simple Steps of Tenant Selection."
Tip No. 1: Pick up the phone. "If (your rent) is going to be late, give me a call," Conrad says. "It matters, big-time." Late rent payments often amount to late mortgage payments for the landlord. And that makes a landlord very unhappy.
"They're probably not going to negotiate a lower rent," Conrad says of tenants, "but they might be able to negotiate time."
Conrad cites an example of a tenant of his who got about a month behind in her rent while she was sick. "She would call me: 'Don, I get paid on this Friday. ... Is that OK?'" he recalls. "It's not that we were friends, but I could tell that she was really trying, and the lines of communication were open."
But, importantly, Conrad knew the woman was a good bet, and "I could see the catching up coming."
How do you earn that trust? How do you exude reliability — just in case you need to fall back on your reputation?
Tip No. 2: Burnish that history. Two words, more than any others: good credit. "Keep your credit record clean as a whistle, because it will be checked out — except by an idiot, and who wants an idiot landlord come January when the heating fails?" says Lesley Henderson, author of "The Tenant Survival Guide: Essential Reading for Prospective Tenants and Those Already in Rented Accommodation."
Tip No. 3: Barter. "Think about what you can do and what they need, so you're asking for a break, but they're getting something in return, too," Bencken says. Are you a graphic designer who could design fliers or a professional-looking logo for their business? Would it be a simple enough task to shovel snow for the landlord each winter, in exchange for a cut on the rent or an upgrade to your dated kitchen?
One writer on Bencken's blog said his landlord needed Internet access, so the renter gave him his password to his Wi-Fi connection in exchange for a rental reduction.
A caution: As with so many things, get it in writing, so there's no confusion later about the agreement and the amount, Bencken says.
Tip No. 4: Make nice and learn names. Before you need to rely on it, "Carry on an ongoing contact and relationship with the folks who run the building — the maintenance guys, the folks in the office, otherwise the owner," says Ed Sacks, the "Apartment Watch" columnist for the Chicago Sun-Times and author of the book "The Savvy Renter's Kit." "You are establishing rapport and trust - and rapport and trust are noneconomic values beyond words."
When you do that, Sacks says, you're not just the guy in 2C — "you're Joe Smith, or Mr. Smith or Joey."
Drop off cookies over the holidays, he suggests — things like that. "Suck up, yes. Absolutely. I suggest that it will reap benefits the tenant has no idea about."
Savings before renewal
When vacancies are up — the power has shifted to you, the renter. When thinking about renewing, you just need to know how to use that power.
Tip No. 5: Show early that you're serious. The best way to get your landlord's attention is to show — early — that you're ready and willing to move somewhere else if the renewal process doesn't work to your satisfaction.
"Start well in advance," advises Dale Willerton, founder of the commercial-oriented firm The Lease Coach, who shared some general lessons on scoring a good rent. If you wait, "you will lose the advantage of being able to move," Willerton says.
Landlords know this, and can tell when you're not so serious. "Creating competition for your tenancy is the most important thing a tenant can do."
Tip No. 6: Be a sleuth. You need to do your homework. Call up and find out what the vacancy rate is in your building, and in other buildings owned by your landlord. How much did that guy pay who just rented a similar place above you? What are the discounts down the street for similar-sized apartments?
"To get the management companies' information, you can literally look inside the building's entryway and there is always a plaque with their information on there. Call them — usually you are talking to a secretary or assistant who has their listings," she says. Also, peruse their Web sites, along with the sites of companies like Schwartz's.
If you are bold, go to the building and talk to the superintendant and/or doorman if there is one. They are knowledgeable about what units are currently going for, Schwartz says.
Remember: Prices of properties owned by the same company even within the same neighborhood can vary widely, so be sure you're comparing apples to apples.
Tip No. 7: Make your case. Go in and meet with the landlord, present him with the information, and tell him that as a good tenant, this is what you need in order to stay. Many landlords will respect that. "Have an argument for your landlord," Schwartz says.
Tip No. 8: Ask for too much. OK, don't go overboard. But "make sure you ask for more than you expect to get," says Willerton, who says he once was able to get 12 months of free rent on a five-year lease for a commercial client. How? "I asked for 18 months," Willerton says. Remember, it's a negotiation. Start bigger and settle for a little less, but for what you actually want.
"Tenants have to have a mind-set of negotiating to win," Willerton says. "You don't go to your landlord and say, 'As a favor, can you do this for me?' Be prepared to win."
Tip No. 9: Go long. Landlords want stability and certainty. Turnover is unstable and painful for them — particularly in high-rent places such as New York City. "If you are a good, desirable person, they do not want to lose you. It is very hard to find someone that makes 45 times the rent (the usual requirement to sign the lease in New York City) and has good credit," Schwartz says.
"Sign a two-year lease, with a three-month notification for ending the lease, suggests Mike Piepsny, executive director of the Cleveland (Ohio) Tenants Organization. In exchange for giving that security, demand an appropriate rent cut for the area, Piepsny says.
Tip No. 10: Pay up front. "Cash up front for several months' rent will usually negotiate a nice reduction — but check out that the landlord really owns the building (not, say, his identical twin brother) before you pay up in cash," says author Henderson. But first, check whether your credit-card company has buyer protection, and use a credit card if possible, Henderson says. Why? Say the roof leaks and you have to move out for a few months that you've already paid for - a credit-card company can help you recover your money from a balky landlord.
Tip No. 11: Pay early — every month. "A landlord has got to pay bills, so they need cash flow," says John Fisher, director of TenantNet, an advice site for New York-based renters. Suggest paying the rent two weeks early each month in exchange for a discount. "Maybe they'd be willing to take a couple of (percentage) points off," Fisher says. "It all depends on the market, that's what it really boils down to."
Tip No. 12: Go easy on the repairs. Landlords will do repairs and upgrades — sometimes minor, sometimes major — to apartments. State laws even mandate how often some improvements have to be made. (Find some links here, or check with your state's tenants' rights group.) One way to shave some money on rent is to tell the landlord that that lime-green shag carpet still looks fine to you, and you'd be happy to live with it for another year if he'd knock, oh, 50 bucks from the monthly rent, Bencken says.
Tip No. 14: Lobby for an upgrade. "If nothing else works," Bencken says, "ask for a new appliance or a larger repair" for your apartment. This doesn't always work, because some complexes replace appliances on a fixed schedule. But it would at least improve your living situation. "They want you to stay, and if they can give you something — if not lowered rent, then something else — most managers will try to do that," she says. Another idea: Ask for an EnergyStar appliance — those high-efficiency appliances that will save you money on your energy bill.
Tip No. 15: Make a list; check it twice for savings. Make a list of all the ways you spend your money around the apartment complex: Parking. Bundled cable TV. Other services. Maybe an in-house gym. Ask yourself what you really want and use, and ask to have the others removed from your monthly bill. Get creative with your savings strategies: Some auto insurers offer discounts for covered parking; if you're parking in an open-air lot and you know there are spaces available in the underground lot, ask to be upgraded there, free, as part of your lease renewal.
When you incorporate several of these tips, don't be surprised if you save at least a hundred bucks a month — and maybe much more.