How to renegotiate rent when resigning a lease.
July 2, 2009 10:12 AM Subscribe
How does a terrible negotiator go about renegotiating lower rent in Los Angeles?
I've been in my apartment for a year and during that time, the rental market in Los Angeles has softened considerably. Now my lease is up. They haven't asked me to sign a new one yet but I'd really like to renegotiate because I think I'm in a good position to do so. Here's why:
- Aforementioned soft market with nicer places lowering their asking price and a TON of "for rent" signs in the neighborhood.
- Local friends of mine have re-signed their leases with lower rents and/or "resigning bonuses" recently.
- Currently one apartment in the building is already empty. The last time there were units empty it took them 4-6 months to rent them.
- I'm a great tenant. Quiet, clean, prompt with the rent and all that stuff.
So how do I approach this? Here's the complications:
- As previously stated I'm a terrible negotiator. This is compounded by the fact that the owner/super seems like a nice guy.
- The apartment is in West Hollywood and falls under their rent-stabilization laws. I have no idea what this means for me since I signed a lease but it's been up for about a month now.
- I really don't want to move and would like to avoid that bluff if possible.
- I'm not even sure what I should ask for. -$100/month? I don't want to gouge the owner but I'm trying to look out for my own interests here too.
Thanks in advance for any advice you can offer.
I've been in my apartment for a year and during that time, the rental market in Los Angeles has softened considerably. Now my lease is up. They haven't asked me to sign a new one yet but I'd really like to renegotiate because I think I'm in a good position to do so. Here's why:
- Aforementioned soft market with nicer places lowering their asking price and a TON of "for rent" signs in the neighborhood.
- Local friends of mine have re-signed their leases with lower rents and/or "resigning bonuses" recently.
- Currently one apartment in the building is already empty. The last time there were units empty it took them 4-6 months to rent them.
- I'm a great tenant. Quiet, clean, prompt with the rent and all that stuff.
So how do I approach this? Here's the complications:
- As previously stated I'm a terrible negotiator. This is compounded by the fact that the owner/super seems like a nice guy.
- The apartment is in West Hollywood and falls under their rent-stabilization laws. I have no idea what this means for me since I signed a lease but it's been up for about a month now.
- I really don't want to move and would like to avoid that bluff if possible.
- I'm not even sure what I should ask for. -$100/month? I don't want to gouge the owner but I'm trying to look out for my own interests here too.
Thanks in advance for any advice you can offer.
To be successful you will have to be prepared to move. If you are negotiating this while still thinking in the back of your mind that no matter what you won't move then you will not be as credible as if you are willing to walk away from this place. The best way to do that is probably to start looking for new places that are as nice or nicer and cheaper. As pm said you will need this information anyway to justify your position to your current landlord.
posted by caddis at 10:27 AM on July 2, 2009
posted by caddis at 10:27 AM on July 2, 2009
I am not a good negotiator either, but I know that negotiation is different than salesmanship. You're not conning or smoothtalking, so your "ability" is not all that relevant.
Negotiation means both sides have something the other wants. You want less rent; they want you to stay in the apartment, because it'd be hard to find a new tenant at all right now, let alone one willing to pay high rent.
Tell them you fear you might have to move because you can't afford the high rent, then name a number $100 or so lower than what you actually want to pay. Hopefully they'll meet you halfway,
posted by drjimmy11 at 10:29 AM on July 2, 2009
Negotiation means both sides have something the other wants. You want less rent; they want you to stay in the apartment, because it'd be hard to find a new tenant at all right now, let alone one willing to pay high rent.
Tell them you fear you might have to move because you can't afford the high rent, then name a number $100 or so lower than what you actually want to pay. Hopefully they'll meet you halfway,
posted by drjimmy11 at 10:29 AM on July 2, 2009
Also, maybe try to find out what your neighbors are paying. I happen to know my upstairs neighbors, who have a more desirable apartment, pay $100 less than me because they moved in later, when the economy had soured. I plan to use this in my own renegotiation.
posted by drjimmy11 at 10:31 AM on July 2, 2009
posted by drjimmy11 at 10:31 AM on July 2, 2009
To be successful you will have to be prepared to move.
This is so true. When I used to work as a resident manager for a rental operation, I saw this happen several times after the rental market softened.
How it worked was this: one of our current tenants would find either a similar or better apartment, often just blocks away from their current one. They would sometimes go as far as to negotiate a lease with this other landlord, and would bring this lease, with the monthly rent (always equivalent or lower than their current rent) on it, to my boss.
Obviously, we let the troublemakers walk (to my recollection, only one troublemaker tried this anyway, the others all knew where they stood and moved out). But the rest were successful in working their rent down.
But still: you have to be prepared for your landlord to balk, and you have to be prepared to walk should she do so.
posted by rocketman at 10:39 AM on July 2, 2009 [2 favorites]
This is so true. When I used to work as a resident manager for a rental operation, I saw this happen several times after the rental market softened.
How it worked was this: one of our current tenants would find either a similar or better apartment, often just blocks away from their current one. They would sometimes go as far as to negotiate a lease with this other landlord, and would bring this lease, with the monthly rent (always equivalent or lower than their current rent) on it, to my boss.
Obviously, we let the troublemakers walk (to my recollection, only one troublemaker tried this anyway, the others all knew where they stood and moved out). But the rest were successful in working their rent down.
But still: you have to be prepared for your landlord to balk, and you have to be prepared to walk should she do so.
posted by rocketman at 10:39 AM on July 2, 2009 [2 favorites]
Keep it short and simple. drjimmy11 is exactly right--you aren't trying to be a salesperson. In my experience, people tend to talk too much and either give up too much info or end up negotiating against themselves.
Do your research, as others have mentioned, and come up with a reasonable market rate. Add a little bit of buffer to make room for a counteroffer, but don't low-ball. Keep it very simple. I'm not sure how you communicate with your landlord, but I think it's easiest to do these things via email or phone. Say something like "I would like to continue living here, but I believe my current rent is above prevailing market rates. I propose a new 12-month lease at $x/month." Don't start rattling off reasons why you're a good tenant or why it's better for them if you stay or how much cheaper such-and-such apartment is. Unless he's naive, he'll know all these things--you rattling them off sounds like a sales pitch and that undermines your position. Be brief and assertive, yet friendly.
posted by mullacc at 10:52 AM on July 2, 2009
Do your research, as others have mentioned, and come up with a reasonable market rate. Add a little bit of buffer to make room for a counteroffer, but don't low-ball. Keep it very simple. I'm not sure how you communicate with your landlord, but I think it's easiest to do these things via email or phone. Say something like "I would like to continue living here, but I believe my current rent is above prevailing market rates. I propose a new 12-month lease at $x/month." Don't start rattling off reasons why you're a good tenant or why it's better for them if you stay or how much cheaper such-and-such apartment is. Unless he's naive, he'll know all these things--you rattling them off sounds like a sales pitch and that undermines your position. Be brief and assertive, yet friendly.
posted by mullacc at 10:52 AM on July 2, 2009
One thing to keep in mind is that it is West Hollywood, not Detroit or something..some landllords might feel they can still fill the apartment at the same price. At the same time we don't really know how much you feel like you're paying over the average rent.
My office is about 2 blocks from you and I live probably live about 5 mins away, I haven't seen the rents fall that much in my opinion. Hard data of some kind will probably be what you need.
posted by mattsweaters at 11:11 AM on July 2, 2009 [1 favorite]
My office is about 2 blocks from you and I live probably live about 5 mins away, I haven't seen the rents fall that much in my opinion. Hard data of some kind will probably be what you need.
posted by mattsweaters at 11:11 AM on July 2, 2009 [1 favorite]
- I really don't want to move and would like to avoid that bluff if possible.
You're a bad negotiator because you're deceiving yourself about the nature of negotiation. Willingness to leave (or at least the appearance of it) is your only leverage. This is not about who likes who, it's about you and the landlord each doing the best you can for yourselves in the context of larger situations that are beyond your control. He's not going to give you money unless he believes you're prepared to cost him even more by leaving. If that's not on the table for you, don't bother.
posted by jon1270 at 11:13 AM on July 2, 2009
You're a bad negotiator because you're deceiving yourself about the nature of negotiation. Willingness to leave (or at least the appearance of it) is your only leverage. This is not about who likes who, it's about you and the landlord each doing the best you can for yourselves in the context of larger situations that are beyond your control. He's not going to give you money unless he believes you're prepared to cost him even more by leaving. If that's not on the table for you, don't bother.
posted by jon1270 at 11:13 AM on July 2, 2009
Mostly what everyone else said, but I don't think you should say anything like, "I can't afford the high rent." Simple business works just fine here. Be honest say that your previous lease doesn't reflect the current market. If they don't seem willing to accept that or negotiate tell them that there are a few other places with similar amenities going for less and if you can't get a more competitive rate then you will be putting in your months notice. I'd probably say something like, "Hi, I'm a tenant here and I haven't signed a new lease for this year yet. I know the market is much more cometitive now, and I am curious what your current rent for new leases is." Of course leave out what would be redundant if your landlord knows your face and so on. You just need to convey that you need to sign a new lease and you are aware that the market is more competitive. He should get you a price and if it isn't on par with the other places you have been checking out say so.
posted by Feantari at 11:23 AM on July 2, 2009
posted by Feantari at 11:23 AM on July 2, 2009
There is no harm in asking, if that helps.
But in my experience (having just gone though this and having friends try it as well), it's more than being prepared to move... you may have to actually move in order to get a lower rent.
Maybe building managers are not used to this new concept of rent reduction or to foregoing rent increases, or maybe it is easier for them to take a risk losing you and then just renting at a reduced rate to a new tenant. But when you think about it, even if you are a "great tenant", what are you really offering to them in exchange for a smaller rent check? A lost month or two in rent is probably a risk they would rather take than to open the flood gates to a building's worth of rent reduction requests.
If you are seeing bargains in your neighborhood and are prepared to move, maybe now is the time to go for it.
posted by quarterframer at 11:58 AM on July 2, 2009
But in my experience (having just gone though this and having friends try it as well), it's more than being prepared to move... you may have to actually move in order to get a lower rent.
Maybe building managers are not used to this new concept of rent reduction or to foregoing rent increases, or maybe it is easier for them to take a risk losing you and then just renting at a reduced rate to a new tenant. But when you think about it, even if you are a "great tenant", what are you really offering to them in exchange for a smaller rent check? A lost month or two in rent is probably a risk they would rather take than to open the flood gates to a building's worth of rent reduction requests.
If you are seeing bargains in your neighborhood and are prepared to move, maybe now is the time to go for it.
posted by quarterframer at 11:58 AM on July 2, 2009
To give you a little confidence: have you been a good tenant? Paid rent on time, no iffy complaints, no noise complaints againt you, generally not a problem for the owner? If so, he wants to keep you. I own just one rental unit, but if I lost my tenant I'd have to find someone else, and I'd have to rely mostly on intuition to judge what they'd be like once they moved in.
posted by wryly at 12:39 PM on July 2, 2009
posted by wryly at 12:39 PM on July 2, 2009
Best answer: You will not be asked to sign a new lease - you are now month-to-month!
If you did not receive a *30 Day Notice of Change In Terms of Tenancy* stipulating a rent increase at the end of your one year lease, you may not receive a rent increase this year. However, post the one year mark, your landlord can drop an increase on you at anytime, and thereafter every 365 days.)
Sadly....I can almost GUARANTEE your landlord will not lower your rent in WeHo.
Why? Rent Stabilization laws in WeHo are ridiculously tenant-favored in some respects. Once your rent is lowered, the small yearly increases are applied towards the lowered rent for years to come....basically, you could live on a decade or forever in your unit at a below market rate. This is something owners in WEHo hate, generally speaking.
If you get a rent increase notice, you may be able to negotiate against the increase, but a drop in rent is almost certainly out of the question. BE WARNED: if you try any sort of negotiating, especially in WeHo, you risk labeling yourself a "high maintenance tenant." There isn't anything an owner or manager can do to you per se, but it is not fun feeling like that where you live. Yes?
THE GOOD NEWS.... there are so many choice deals out there right now in WeHo, go find yourself something new and fabulous!
Further questions? Try the Rent Stabilization Help Desk on the first floor of City Hall, corner of Sweetzer and SMB. Walk-ins welcome!
(It is also possible that when you give notice, your landlord might offer you a deal. But by then you'll have found the ideal apartment, and you probably won't care;) Also, don't worry about the deals your friends are getting because they probably live in LA, in less desirable buildings, and/or in less desirable neighborhoods. No relation to your individual situation. Good luck!)
posted by jbenben at 5:25 PM on July 2, 2009
If you did not receive a *30 Day Notice of Change In Terms of Tenancy* stipulating a rent increase at the end of your one year lease, you may not receive a rent increase this year. However, post the one year mark, your landlord can drop an increase on you at anytime, and thereafter every 365 days.)
Sadly....I can almost GUARANTEE your landlord will not lower your rent in WeHo.
Why? Rent Stabilization laws in WeHo are ridiculously tenant-favored in some respects. Once your rent is lowered, the small yearly increases are applied towards the lowered rent for years to come....basically, you could live on a decade or forever in your unit at a below market rate. This is something owners in WEHo hate, generally speaking.
If you get a rent increase notice, you may be able to negotiate against the increase, but a drop in rent is almost certainly out of the question. BE WARNED: if you try any sort of negotiating, especially in WeHo, you risk labeling yourself a "high maintenance tenant." There isn't anything an owner or manager can do to you per se, but it is not fun feeling like that where you live. Yes?
THE GOOD NEWS.... there are so many choice deals out there right now in WeHo, go find yourself something new and fabulous!
Further questions? Try the Rent Stabilization Help Desk on the first floor of City Hall, corner of Sweetzer and SMB. Walk-ins welcome!
(It is also possible that when you give notice, your landlord might offer you a deal. But by then you'll have found the ideal apartment, and you probably won't care;) Also, don't worry about the deals your friends are getting because they probably live in LA, in less desirable buildings, and/or in less desirable neighborhoods. No relation to your individual situation. Good luck!)
posted by jbenben at 5:25 PM on July 2, 2009
Don't just look at listings for other places, actually go and check out a few. When my girlfriend and I did this, we made appointments and looked at a few comparable cheaper apartments in the same neighborhood. We weren't really planning to move at first, but after looking around we actually got pretty excited about a couple of prospects. We were almost a little disappointed when our landlord went along with all our requests and we didn't have to move after all.
posted by contraption at 10:26 PM on July 2, 2009
posted by contraption at 10:26 PM on July 2, 2009
This thread is closed to new comments.
Keep the letter business-like--outline the reasons for a lower rent (softer market, similar apartments in the area going for X, you're a desirable tenant) without including the anecdata (my friends got a signing bonus, etc).
Don't think of it as "gouging" a "nice guy". Think of it as a business arrangement--it should work for both of you. He's not going to give you a rent that he can't afford, but you shouldn't pay more than you have to just because you're scared to ask for it.
posted by peanut_mcgillicuty at 10:18 AM on July 2, 2009