!#71# Apartment Lease Negotiation Tips for Lower Rent and Cheaper Renewals!

!±8± Apartment Lease Negotiation Tips for Lower Rent and Cheaper Renewals!

Imagine this typical scenario:

You return to your apartment after a long day and find in your mailbox or under your door an official letter from your landlord. It says that your current lease will be ending in a few months and that you have two alternatives: (1) receive a "one time special" if you quickly renew your lease for another year, or (2) pay a higher rate if you instead go month-to-month. To your dismay, the new rent amount for both alternatives is significantly higher than what you are currently paying to this landlord. What will you do?

Step 1 is to stay calm. Your landlord's strategy is to play on natural fears of further rent increases as it gets closer to renewal time. They know this, and you should too. They are writing this way because landlords have learned that most people will rush to judgment and thus quickly agree to their initial terms and rent increases. However, understand that much of what's in this initial letter are just dream amounts and dream terms for your landlord. Especially, if there are currently any "for lease" signs or similar promotional materials on the grounds of your complex. So remember, stay calm. You can usually ignore this initial letter and wait to respond after receiving their follow-up note a few weeks later, which will often include better terms and conditions. In the meantime...

Step 2 is to understand. If you can think like your landlord, you will be able to write a simple, but effective, letter to your landlord that has proven to get results. What to include? Keep reading and you will learn how some creativity, a little research, and reasonable confidence can help you to reduce their asking amount even further. And, from this base you will understand how to ask for the lease duration that best meets your needs, and how (depending on market conditions) you can even have a new lease where you pay less rent than your current lease.

First, an example of what NOT to do: Many people mistakenly think that they should tell their landlord they are prepared to move, but that they would really like to stay so they can save on paying moving expenses. In this case, you are not negotiating from a power perspective. Your landlord knows that moving costs (e.g., truck, supplies, labor, etc.) represent money from your pocket, so they will almost always say, "no, do what you have to do, and move." They know from experience that most people want to avoid moving hassles so they figure in this example that tenants will eventually take any "found money" that would have been spent on moving expenses and instead "give it" to their landlord via compliance with their initial rent increase letter.

Alternatively, by using the techniques that follow, we are going to turn this above situation around and show you how to convince your landlord to willingly take money that they would have otherwise spent on re-rental activities and instead "give it" to you in the form of a direct rent reduction or indirect rent concession to the original terms. To better see why this works, understand that your apartment's leasing manager (the person who can approve rent discounts) most likely reports to someone at a larger corporation. And, that someone wants a signed lease -- no matter the term -- to limit their uncertainty and risk exposure, and to help with corporate planning. You must use this to your advantage. Thus...

Step 3 is to do your research. Check online websites for any rent specials. This includes mass-market sites such as Apartments.com and Rent.com, plus the website of your apartment complex and management firm. What specials are they offering to new renters? Print these out. Also, check the web for similar complexes that are near your current apartment and those that are known competition to your current landlord. Especially interesting are those places that are brand new and those that are charging comparable amounts to your older rental unit. You will use these numbers to determine a reasonable counteroffer for your proposed new lease.

Step 4 is to write. You will send to your leasing manager (i.e., landlord representative) a polite, but direct, one-page letter that initially:

(A) "Thanks them for their letter of ____ (fill-in date) regarding their desire to have you continue as a high quality resident of ____ (fill-in name of apartment complex) after your current lease concludes on ____ (fill-in date)."

(B) Asserts that "You are unable to sign a new twelve-month lease agreement with their firm and that the terms and conditions provided by their firm for month-to-month leasing are unacceptable."

(C) Mentions that "However, understanding your desire to maintain positive cash flow and occupancy of my unit via multi-month commitments in these economic times, I respectfully offer the following modified terms:"

It is here that your research can pay big dividends. You must now state that "I am willing to sign, immediately, a ____ (fill-in desired rental duration) months lease for my current unit with the following modified provisions: ____ (state how much you are willing to pay and specifically what discounts and/or other benefits such as free parking, storage, and competitor or management-advertised rebates for which you are asking as per your research)." If appropriate, attach a copy or short summary of any relevant pricing or specific promotional printout.

To strengthen your claim, state that "This arrangement is a 'win-win' and provides a solid basis by which both you, ____ (fill-in the name of your apartment's management company), and myself can mutually meet our individual, corporate, and personal needs." Next, if there are any special circumstances that help your case (see below), you would include them here. For example, "The above is consistent with comparable properties in the area and is asking for nothing more than what is currently being offered to your new ____ (fill-in name of apartment complex) tenants." Or, if you were a mid-year renter in a college town and wanted to stay shorter than an additional full lease term you would write, "The proposed arrangement enables you to put my unit back on cycle so that you can receive premium student rents next year since this proposal makes my unit available in August / September of next year rather than after the prime student rush."

Conclude this letter with a paragraph that further reinforces your position by communicating the following facts to your leasing manager / landlord representative:

"Immediately, this proposal enables you to have my unit generating income -- not vacant -- for an additional ____ (fill-in duration) months from today. Not only is this positive considering the current rental market, but you eliminate cleaning fees, searching/agency fees, and income loss; and are ensured by having a quality tenant who has consistently paid on time, is not a 'hell raiser' with neighbors, and who keeps the unit in as high a clean and quality condition that is possible as per normal living conditions." Your last sentence should always be a call to action. For example, "Please call me upon receipt of this letter so that we can setup a time to sign all forms that will complete this proposed renewal. I look forward to our mutual agreement. This is a 'win-win' for all involved!"

Step 5 is to enjoy. Congratulate yourself for a job well done. You've earned your discount and can now celebrate the fruits of your labor for the rest of your new lease. And, remember, you can do this all over again next year! You have shown loyalty by staying, and they will still make more money by giving you the discount rather than getting a new person because the unit will not be vacant for an unknown length of time. Nor, will they have exceptional cleaning fees or new painting expenses between tenants.

Finally, keep in mind that your lease benefits might be written in the form of a rent concession instead of as a rent reduction. What this means is that if you break your lease and leave early, you might be responsible for paying back to your landlord the difference between the negotiated concession and their original offer. If it's a straight reduction, this might not be an issue. Though, standard liquidated damages clauses in your lease might still be there and require you to pay a "break the lease" penalty. Either way, current market conditions, the quality of your tenancy, and how long you intend to stay will influence the amount that you will eventually pay for rent. Good luck, and happy living!