beans/beanie

Step 0: Know Thy Enemy

The key thing to understand about all residential landlords, whether they’re corporate conglomerates or Just Some Asshole, is that their asset—the property—is a Cinderella carriage that magically turns back into an expensive ass pumpkin of a liability any time it’s sitting empty. The property taxes, insurance, mortgage, HOA fees, and maintenance costs all still come due every month/quarter/year whether they have a tenant to cover it all and then some, or not. 

Because of this, at the end of the day, their ultimate goal is to fill every unit at all times with someone who will reliably pay the rent on time and in full. And because everything else is secondary to that goal—and because with the exception of Just Some Asshole landlords, the person responding to your emails and writing up your lease paperwork is several degrees of separation removed from the shareholders who profit off your rent money—they’re almost always willing to negotiate with you. As long as it gets the liability converted into an asset faster or keeps the carriage from turning back into a pumpkin for longer, then in the long run, it’s actually in their best interest to give you a better price. 

Step 1: Identify Your Leverage

If you understand how supply and demand works, you can figure out how much leverage you have pretty easily.  High supply and low demand = you have more leverage, and vice versa. Do they have an “AVAILABLE NOW - MOVE IN TODAY” sandwich board on the sidewalk or a web banner that says “First month free”? Does their website and/or Apartments.com show a bunch of currently open listings? Do you already live there and know at least two families on your floor have moved out in the last several months with no one new moving in to replace them? These are all indications that they have more than one unit currently sitting empty, meaning higher supply and lower demand. No sandwich board and a website that just says “call for availability”? They might just suck at marketing, but more likely, supply is lower and demand is higher. 

You have the least leverage if you’re a prospective tenant looking to move in somewhere that has a waitlist. They have no reason to offer you a discount if six other people are already in line to pay full price for apartments that aren’t even vacant yet (but you can still ask!). You also have no leverage to negotiate if you’ve already signed a lease and you’re in the middle of the lease period; you legally agreed to pay $X/month for Y months, so you’re stuck with that until the lease is up.

At the other end of the spectrum, you have the most leverage if you’re a current tenant who has always paid your rent on time and you’re being offered a renewal on your existing lease with higher rent than you're currently paying, especially if they already have some units that have been empty for a while. If you move out, not only is your unit going to sit vacant for at least part of a month, they’re also probably going to have to put in some work to “turn” the unit (repainting, professional cleaning, etc) to get it in move-in condition for the next tenant.

All of this means that if you move out, even if they can fleece you out of your security deposit and find a new tenant the very next month, it’s still gonna cost them at least a few thousand dollars to turn that pumpkin back into a carriage again. They’re probably willing to come down by $100-$200/month or so on the renewal offer rent if you ask, because they know it’ll actually save them money in the long run. Similar situation if you’re a prospective new tenant—if they can’t get you or anyone else to sign a lease and move in this month, that’s $[whatever the monthly rent is] down the drain, and they’ll never get it back. It’s a perishable item about to spoil. 

Step 2: Get Their Opening Offer

This is the first number they’ll quote you for the rent—the sticker price that you’ve always just accepted as set in stone. The truth is, they’ve built some buffer into that number. There’s almost always some room for them to come down, and depending on your leverage, they will if you ask nicely. But for reasons that baffle me, most people don’t!

Step 3: Wait, Research, & Counter

Don’t reply to their initial offer right away—unless there’s a waitlist (in which case, you have little haggling power anyway), wait a few days. It makes them sweat a bit, and it shows you aren’t desperate. The person who is rushing to reply is not the one who has more leverage in the negotiation, and making them wait reminds them of that. In the meantime, use Apartments.com or Zillow to get an idea of what similar units in the same area are currently going for. Then you come up with your counteroffer.

As a general rule, anything more than about 20-25% below their opening offer (or below market rates) will probably just piss them off or make them take you less seriously. But when we’re talking about your monthly rent over the course of a year or two, even a 10% discount adds up to a lot of money!

When I negotiated our original lease for my current place, I also asked for and got a two year lease term instead of the standard one year. But whatever automated calendar event system they use to remind their leasing office staff when it’s time to send out renewal offers didn’t get the memo about that, so they mistakenly sent me a renewal offer the following year, meaning I got to see how much they would have jacked up the rent if they could’ve. For that second year of the lease alone, my negotiating saved us $3,000! 

Step 4: BDE (Big Dick Emailing) 

Here’s the tricky part. You need to write an email—always negotiate over email if you can, it’s too easy for a salesperson to bowl you over on the phone and anything they say that isn’t in writing means nothing—which simultaneously makes it sound like you would sign a lease with them in a heartbeat and like you are actively flirting with five other apartment complexes right now who all want you so bad it makes them look stupid, because you are just so sexy and fun and your credit score is eight inches flaccid. You need to make them believe you are both highly motivated and ready to sign on the dotted line and willing to just walk away from the table at any second, but if they could just come down a little bit on that number, you’d delete those other hoes’ numbers forever! Here’s the rough script I use every time:

“ Thank you for [your email/the tour/sending over the offer letter/etc]. I have had a chance to review and consider it. I think [name of apartment complex] would be the perfect fit for me, but I am also exploring and touring other options in the area, including a comparable unit nearby at $[a little below your counteroffer number]/month.

If we could come down to $[your counteroffer number]/month on the rent, I would be prepared to sign the lease today. Let me know your thoughts. Thanks! "

Step 6: You Win Either Way