Your lease is coming to an end, and you’re faced with the choice to stay put and renew with your landlord or start searching for a new place. But when your landlord or property manager notifies you that your rent will be going up if you stick around, that higher rent may be making the decision for you.
In a housing market where apartment buildings are being constructed quickly, leasing agents and landlords must be competitive to attract tenants – in some cases adding amenities like on-site dog parks and concierge services and offering concessions like a waived security deposit or paid-for moving expenses.
Still, all this new construction doesn’t meet the needs of the current nationwide housing shortage. Especially if you already live in a pricey city or metro area, rents continue to climb. In a study of average monthly rents in July 2018 for 130 ZIP codes throughout the U.S. by RENTCafé, a rental information company and subsidiary of Yardi Matrix, 38 of the 50 most expensive ZIP codes had year-over-year rent price growth.
How can you avoid taking on unmanageable rent increases imposed by your landlord? It’s an uphill battle, says Nat Kunes, vice president of product at AppFolio, a full-suite property management software company: “You don’t typically have a lot of leverage as an existing tenant.” But you do have a few options to negotiate with your current landlord, trim your monthly costs in other ways or simply start looking for a better deal with a different landlord elsewhere. Here are five options.
Move within the building. If you’re already stretched thin in your one- or two-bedroom apartment where you don’t actually need the space, inquire with your landlord about smaller options available in the building.
Studio and efficiency apartments typically don’t lease as well as units with separate bedrooms, says Doug Ressler, director of business intelligence for Yardi Matrix. “The market rate for studios is not as vibrant as the larger apartments,” he says.
One possible reason for this lower demand is the fact that tenants are less likely to live long-term in a studio, or they may opt to live with roommates to afford the larger space or a better location, Ressler says.
If your landlord has vacant studios, offering to take the space and free up a larger apartment that’s easier to rent means you’ll be dealing with lower rent and your landlord may be willing to provide a couple of concessions, such as free moving help or waiving application fees or background check costs since you're already a tenant.
Sign on for a longer lease. Your best bet for lowering your monthly rent while staying in the space is to offer to guarantee to your landlord that you’ll be there for a while. “The main bargaining chip that tenants have upon renewal is how long they re-up for,” Kunes says.
Rather than letting your lease transition to a month-to-month agreement, “if you sign another six-month or 12-month lease, you might get discounted rent off of that, so that’s where you’re typically seeing the negotiating power from,” Kunes says.
If you’re a fan of the building and plan to be around awhile, an 18-month or two-year lease can guarantee a stable, lower monthly rent for a period. But don’t sign a two-year lease if you know you won’t be staying the full term. Breaking your lease isn’t always easy – or cheap – and your landlord will be less likely to help you if you’re creating a vacancy that wasn’t supposed to happen.
Ask for different perks. Landlords aren’t always willing to budge on rent in a lease renewal, but you may be able to offset base rent costs with other perks or concessions.
Kunes says he’s seen landlords offer long-term tenants a new appliance in the apartment, and at the end of the lease term it’s the tenant’s to keep. For example, “Here’s a brand-new fridge – you can take that with you at the end of the lease term,” he says. If your next place provides all appliances, you can simply sell your slightly used one for a profit, or keep it if providing your own appliances is necessary, which is often the case with single-family house rentals.
Bring in a roommate. You may be hard-pressed to find a roommate willing to share a studio or small one-bedroom apartment. But if you’ve got an extra bedroom or den that can be converted for another person’s use (and your lease allows it), you can cut your rent in half.
Even if getting a roommate requires you to move to a larger unit in the same building, the landlord may be willing to provide additional concessions for taking a unit that may be harder to lease. And even with a higher overall rent, splitting it in half also means your utilities and internet costs are halved – and you’ll likely see your total cost of living go down.
Move somewhere else. You may not have enjoyed your renting experience in your current place, or your landlord simply may be unwilling to budge on rent increases to renew. When that happens, take a look at your options to move somewhere else.
Rents may be climbing, but be sure to factor in potential savings through concessions that may offset your total cost of living. Traditional concessions come in the form of a month of free rent for new tenants or a waived security deposit. Other concessions rising in popularity cater to the individual renter.
“Especially in high rent-growth areas, they’re high-rent growth because they are competitive for tenants, so tenants are motivated to get in quick and close the deal,” Kunes says. “This is just a little sweetener on top to get them to lock in with that particular property quickly.”
Kunes says landlords and property managers are finding out what prospective tenants' interests include after getting to know them and offering concessions accordingly – six months of free weekly yoga classes, for example, or a few months of free daily dog walks if the renter has a dog.
“What it does is create a great experience for tenants at the property,” Kunes says. “It differentiates the property management firm in the eyes of the tenants and sets them up for a great relationship ongoing.”
Weigh your options with the footprint of your next apartment as well. Newer apartment communities tend to have smaller individual units, which Ressler says is a developer strategy to fit more people in the building and reduce the need for astronomical rent increases.
“Right now, the density is such that says, ‘If I’m going to house X amount of people in a given property, if I can house a greater number, then I don’t necessarily have to raise the rents on a smaller, lesser number [of residents],” Ressler says.
A building with smaller apartments rarely means the switch from sprawling loft to micro-unit, and many renters don’t miss the loss of 100 square feet or so in exchange for steadier rent, more amenities and a newer building.
Pulling one over on your property manager won't work.
Your ability to communicate with your landlord or property manager as a renter is key to living happily and in peace. When you fail to notify your landlord of problems you encounter – or try to hide guests or other things that may not be permitted in your lease – the relationship is often compromised. Especially in instances when you’ve brought in an unauthorized pet or let a maintenance issue get worse due to not reporting it, you may find yourself having to pay your landlord extra, losing your security deposit or even getting evicted.Stay in touch.
Stay in touch.
Any good landlord will encourage tenants to be in communication often, which makes it easy to request maintenance or ask a question about what the lease allows. Property management companies often offer multiple forms of communication, from face-to-face conversation with a receptionist or leasing agent to contact via email or an online resident portal, says Lynn Edmondson, regional manager of Wendover Housing Partners, a property management company based in Altamonte Springs, Florida. Once you send a request, the property manager or landlord will then “communicate in writing about what’s going on and what needs to be done,” Edmondson says. Read on for seven things you shouldn’t – and likely won’t be able to – hide from your landlord.A new roommate
A new roommate
Living with a roommate is a great way to save on housing expenses, but your landlord has to know about said roommate – and approve. It may be a matter of simply revising the lease once you notify your landlord of the desired addition, but your landlord also has the right to run the potential roommate through the same vetting process as with every other tenant, which can include a credit check, employment confirmation and previous residence referrals. If you sneak a roommate in, your illegal co-tenant could be evicted. One exception is when you have a dependent, which can be a child, elderly parent or an adult relative you legally care for. Laws in certain states clarify that “you’re not allowed to ask an applicant if they have any dependents living in the unit with them,” says Nat Kunes, vice president of product at AppFolio, a full-suite property management software company. Check your state's landlord-tenant laws, which should be available online, for more information.A sublet
Just like a roommate, sneaking a sublet tenant into your rental will likely be found out by a landlord, and it can have devastating consequences. Always review your lease first for a subleasing policy. The landlord may not allow sublets at all or could require the subtenant to go through the same vetting process all residents go through when applying to live there. Also check your state laws on subleasing, which may give you more or less leeway depending on how detailed the law is. In South Carolina, for example, the law states a sublease agreement isn’t valid unless the landlord has signed off on it. An illegal sublet could result in your eviction for violating the lease, as well as the subtenant’s eviction for residing there illegally.A pet
A dog or cat won’t help you pay the rent, but millions of Americans love adding to the rental family by bringing a pet home. Again, however, your landlord has the right to establish a no-pets policy or place restrictions on the pets allowed, such as the type of animal, size and breed. “If the pet [is] qualified to live there, it’s just a minor thing of changing the lease to add that and collect the appropriate fee,” Edmondson says. If you get caught keeping a pet in your place when the landlord hasn’t approved it, you’ll likely have to fork over the fees anyway. But if the place doesn’t allow pets, you’ll likely either be asked to move out or rehome your pet.Pet damage
Outside of properly notifying your landlord or property manager of a new pet, Edmondson says damage to a rental caused by a pet is one of the more common issues she sees residents try to cover up. Whether you struggled to housetrain a puppy or your cat loves scaling the blinds, the best course of action is to own up to the damage before moving out. “I’ve had that happen several times, when [cleaners] go in to clean the carpet and they come back and say, ‘We can’t clean it, there’s too much pet damage,’” Edmondson says. You’ll have to pay for the repairs regardless, but it keeps a more positive interaction between you and the property manager if you’re honest. Trying to get away with damage could also lead to a negative report from the property manager if any future landlord calls to check on your residential history.Maintenance problems
Whether it’s a backed-up toilet, a leaky roof or fire damage in the kitchen, any problem should be reported to your landlord or property manager as soon as you become aware of it. “A lot of those types of maintenance issues that over time get much, much worse,” Kunes says, noting a leak can lead to extensive water damage and mold. Edmondson says there are tenants who simply don’t report such issues for fear of having to cover damage they caused: “They think after they move out they will not be responsible for those damages.” Of course, any damages outside normal wear and tear will come out of your security deposit, and you can additionally be billed for damages exceeding that amount.Broken appliances
If the fridge, dryer, garbage disposal or any other appliance stops working properly, you have the right to report it and expect it to be fixed. There’s a good chance the landlord will replace an older appliance at no charge to you. If the appliance is relatively new or was damaged from particularly hard use, the landlord may look to you to cover it. If you move out before notifying the landlord, it will be discovered, and you’ll be expected to pay it, Edmondson says.A pest problem
A pest problem
Pests can get into a rental property in a variety of ways: Rodents could be stirred up by construction next door, or maybe other tenants have a habit of leaving food uncovered on the counter or table. Either way, it’s imperative you notify your landlord immediately about a pest problem so it can be taken care of. Most large apartment complexes have standing relationships with pest control companies, which consistently work to keep pests from accessing any rental homes and limit the spread of those that do get inside. If you don’t start communicating with your property manager early on, the problem could become worse – and the blame may fall on you as a result. “That could be a tenant-caused issue that the tenant could be responsible for to pay,” Kunes says.Read More
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at firstname.lastname@example.org.
Devon Thorsby | June 5, 2019
Homeowners should not fret, as long as they're prepared for the possibility of a downturn.