5 tips for negotiating lower rent on a new apartment

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Most of us think of the rent on an apartment as a fixed price, especially if you live in an area that’s clearly a landlord’s market, with 100 other potential tenants lined up behind you with their wallets open. But I once had a landlord who, hungry to get a new apartment building filled of occupants, showed his hand. I learned from that encounter a few things landlords want that you might not realize are valuable to them. The result? I got a really nice apartment for just a tiny bit more than I’d have paid for a very average one in the same area, and that tiny bit more was averaged out by the fact that my apartment was all Energy Star, so I paid much less on several of my utility bills compared to what I’d have paid in most buildings.

Negotiating lower rent

It helps to be a desirable tenant, so make sure you look presentable. If you don’t have great credit but you do have a good job, you might want a letter of reference from your employer stating what your salary is and how confident they are in your continued success with them. If you have great credit but not a fantastic job, be prepared to explain confidently how you’re going to pay the rent (the credit history may speak for itself, but it’s good to be ready for anything).

The next thing you should realize is that landlords don’t like low rent prices on their books. When they go to apply for loans or try to sell a building, it looks good for them if they can say they’re collecting rents of a certain amount. So asking for freebies that can lower your out of pocket expenses is often the better approach.

1. Suggest a two-year lease. If you’re sure you don’t mind staying put that long, some landlords will give you a couple of “free months”, which equate to a significant break in what you’ll pay over the two years if you’ll commit to it for two years instead of the standard one year. This benefits you, too, because the price can’t possibly go up until the lease expires. The one big risk with this approach is that you might find a loud party animal moving in next to you (this happened at another apartment I lived in, and I had to get a lawyer to help me break the lease). Before committing to a two-year deal, ask your landlord for assurances that loud partiers will be evicted or dealt with in some fashion.
2. Ask them to throw in utilities. Again, free utilities don’t really show up on the books because they get bundled into other various “expenses” in running the building. A good approach here is to ask a lot of questions about the utility bills: how much are other tenants paying for electricity, gas, water, anything else not covered? They may offer to pay one or more utilities for you, and because they think it was their idea, they’ll feel like they’re getting the better of the negotiation. If they don’t offer, it still can’t hurt to ask. Let them know you’re balancing not only the rent of this apartment versus others you’ve looked at, but the total expense of living in each of these buildings.
3. Ask for a free month – or two. Let them know other buildings you’re looking at offer a free month or two as an incentive (this is almost always the case – check Craigslist and you should find multiple offers of this type). They’ll often match this offer to get your name on a lease. (I once got three free months on a two-year lease.)
4. Point out price discrepancies in their ads. There’s a little scummy and illegal trick that landlords – at least in high rent, high occupancy cities – sometimes pull. They put out an ad saying the apartment is $1500 per month, but when you come to see it they start talking about $1600 or mentioning there’s a $X/month fee for something. Whip out the ad and remind them that the law says they have to honor the ad. This shows them that you’re not someone they can fleece, and they’ll start negotiating with you. The time this happened to me, I ended up with a better deal than what was in their ad. Don’t settle for paying more than what’s in the ad.
5. Don’t try to negotiate the security deposit. In my experience, when landlords charge a security deposit (often a month’s rent or more), this is something they won’t budge on. You may be able to bring the price down if it’s ridiculous (like, two months’ rent). But rather than trying to negotiate about the security deposit, try to negotiate for free months of rent instead. You might also try to negotiate a payment plan on the security deposit if you don’t have all that cash laying around at the moment.

More to consider

There are other expenses related to your apartment that you need to consider in order to get the best deal for you.

• If housing near your work is expensive, consider the cost of a commute. Does the decrease in rent offset the gas and increased car maintenance, not to mention the stress and wasted time of the commute?
• Can you get an Energy Star/LEED apartment, where all the appliances and wiring are engineered to use the least electricity and gas they can? Those savings can really add up. I’ve lived in two very energy efficient apartments, an old building with windows that didn’t work and everything in between. I find I save at least $100/month on utilities in an energy efficient building, so when I’m considering an energy efficient apartment against one that’s not, I deduct in my mind $100 from the price of the energy efficient one.
• Also take a look at security: some insurers cut you a break on auto insurance if you park your car in a secured garage or in a gated community. Apartments with secure parking spaces usually cost more than those without, but the extra expense is frequently offset by auto insurance savings.
• Another feature to consider is whether the building is within walking or bicycling distance of shops you like. I can do most of my grocery and drug store shopping on foot, which gives me some exercise while saving on gas.

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Updated: October 24, 2011
Copyright: April 8, 2008