Seeking second year rent negotiation tips for Menlo Park CA

July 6, 2010 11:19 PM

I'm looking for help negotiating my second year lease renewal monthly rate. How should I hold myself during the negotiation? What should or shouldn't I say? Should I actually go through the trouble of negotiating a lease with an apartment complex across the street, or is it sufficient to quote their price from the advertisement? Also, for a current rent of $1999 and a quote for next year at $2299 what chance is there that I can negotiate $0 increase, $100 increase, $150 increase, etc.

I managed to secure what seems to be a great deal (for my apartment complex at least) last July. I'm paying $1999 for a 2br 2bath in very expensive Menlo Park in an apartment with some very nice amenities, and just today received the offer for $2299 to renew the lease for a year. (Rent does not include a very expensive monthly water/sewer/trash bill averaging $99.50 monthly calculated as a fraction of building-wide usage.) We're two Stanford graduate students with good credit and have never been even one day late on our payments.

To me, it is almost worth the $300/mo increase just in opportunity cost of having to move, but it definitely isn't to my roommate. However, neither of us can afford the current rent on income alone and as such have no disposable income. (We draw upon our individual savings for living expenses given our not-at-all-generous-given-the-surroundings'-cost-of-living Stanford stipends.)

There are other very comparable apartments for cheaper than the quote. What is basically the same apartment in a different complex across the street is listed at $2100 including utilities. I even spoke with the landlord who said he "may be willing" to negotiate his price. Do I need to go through the hassle of getting a full lease offer from him or is it sufficient to quote his price as a comparable rent.

What's the best way to approach this rent negotiation? Should I say that we truly want to stay here? Should I say that we will move if we have to?

Also, is there any chance I can negotiate them to no increase? What should I expect them to say?

I've written down the following points to have accessible, is there anything I'm missing?

- Last year's "base rent" is listed $2810 but we pay $1999 due to a total concession of $9700 applied monthly

- Two other 2br 2ba apartments with the same floor plan in this apartment are listed at "base rent" $2470 and they are asking us for $2299 (increase of $300 despite a base rent decrease of $340)

- There is a nearly identical apartment available across the street for $2100 including utilities, and the landlord said he would consider negotiations on that price when I spoke with him today

- Nothing has changed in our annual income since last year (we're still graduate students), and the leasing office knows that and knows that we were only able to accept their least terms last year after their price concession.

- They are advertising a "renew and refresh" special where they will make apartment improvements if tenants agree to renew now, but they gave us no such incentive to renew (I'll wait to comment on this until after (that is, if) I can negotiate a lower renewal monthly rate.)

Thanks in advance for any help!

posted by pariser to Home & Garden (10 answers total)

Check the tenant law in your area--there may be a maximum permissible rent increase. Here in Vancouver, it's something like 4% per year. Landlords will frequently just tell you what they will and count on you not to know your rights--and they usually get away with it.
posted by fatbird at 11:28 PM on July 6, 2010

move across the street!

you said that the apartment there is essentially the same as the one you are living in, for $200 less a month and utilities are included! why would you want to stay in a place that is more expensive now, and where you are not getting an incentive to renew?
posted by seawallrunner at 11:31 PM on July 6, 2010 [1 favorite]

You should absolutely negotiate. I just moved into a place in LA that was renting for $1500 a year ago and I'm paying $995 (granted it was advertised at $1200 to reflect the market, but it took nothing to get them to drop it). It's a renters' market. Play hardball. Moving across the street is SO easy. They will not be able to fill your apartment for MONTHS and probably not without dropping the rent down to $2100 or less. Even then, I bet there are vacant apartments in both buildings. When I was looking for apartments, I looked at over 20 all but one had been vacant for over a month. Some for much longer. Remind them of this repeatedly.

So to your question.

Yes say exactly what you want.

Say you will have to seriously consider moving if they raise the rent (I wouldn't give them a penny more than you are currently paying in this market).

Make it very clear that you have checked out the competition. They are trying to raise your rent well above the market rate and you have U-haul on speed dial.
posted by whoaali at 11:32 PM on July 6, 2010 [1 favorite]

15% raise of rent? They're looking for a sucker. Don't be a sucker.
posted by madcaptenor at 4:26 AM on July 7, 2010

Best answer: When you negotiate, don't worry too much about how you "hold yourself." This is not about putting on an act. Don't pretend to be confident. Make yourself actually confident before you go into the discussion. Also, forget the fact that you're both grad students on tight budgets, as this simply doesn't matter; your landlord is not your parent.

It's critical have a clear idea of what it makes sense for you to pay, and to also have an idea of what it would cost your current landlord if you moved out.

The most it would make sense for you to pay would be market rate plus cost of moving (including both cash costs and inconvenience) plus some amount that reflects any emotional attachment you might have to your current place. If the price can't be moved below that sum, then your course of action is simple: move.

On the other hand, the least it would make sense for the landlord to accept is market rate minus costs associated with replacing a tenant. How much would your current apartment actually fetch from a new tenant? Does he have to paint and/or replace carpeting? Would the apartment be unoccupied for a month after you moved?

During the negotiation, ignore the sticker price ($2299), and negotiate UP from the minimum amount you think the landlord could could rationally accept. If your current rent is already at or above market, your opening offer could be LESS than your current rent.
posted by jon1270 at 5:17 AM on July 7, 2010

For what it's worth, a few years ago my apartment complex wanted to raise my rent $50 a month. I went and looked at a bunch of different apartments in the area, then went in to talk with them.

"So, (amount) is the best you can do?" I asked.
"Yes." She said.
"In that case I'm moving -- I can get an apartment for (a hundred dollars less a month) down the street, here's a letter giving you 60 days notice that I'm moving out." I said.
"Wait wait wait wait wait." She said.

Then they lowered my rent $10 a month.
posted by Comrade_robot at 7:08 AM on July 7, 2010

I also live in Menlo Park and there are tons of empty apartments - I absolutely think you can negotiate this. I also think you should seriously consider moving across the street. That isn't even a bluff you'd have to worry about getting called as carrying things across the street isn't exactly having to hire movers, etc. The cost of moving there should be incredibly low even if moving is always a pain in the ass.

My last rent increase was $50, two years ago. Asking you to pay that kind of increase is insane. It also seems weird that you pay for water/trash on top of the rent as I've lived in three different apartments in MP and none have ever had those as separate costs.

I don't think that your negotiation should include any mention of what you're capable of paying/not-paying. Your student status and actual income don't really matter and I don't think they should care about that - only about what you're willing to pay vis-a-vis the market and other available places.
posted by marylynn at 12:08 PM on July 7, 2010

you need to check your lease. ours has a specification that rent won't be raised more than 5% a year. so if your lease has a specification of 15% or more, then you don't really have any negotiating room. you signed the lease. if it's 15% or less, then they're in violation of the lease.

but really, you shouldn't be living in an apartment that costs more than your income and that you have to dip into savings to help pay for.
posted by misanthropicsarah at 2:31 PM on July 7, 2010

If they're asking for that big of an increase in this market, they have to be bluffing. Negotiate.
posted by ishotjr at 4:08 PM on July 7, 2010

Response by poster: To those interested, I was able to negotiate down to $2199 ($100/mo less, making the rent increase 10% instead of 15%). The place across the street is almost identical but has an oven that hasn't been used since 1960; seeing as my roommate and I both cook 4-5 times a week, that is a non-starter. We're still looking for other options, but I suspect we'll stay, if nothing else to avoid the huge hassle required in moving.

I honestly don't believe that they were bluffing all that much if at all. When I spoke with the community manager (who had little power beyond emailing a request to the regional manager), she was very reasonable and explained to me that they do extensive market research and find the prices of their main competitors. They gave 25 such rent increases to tenants whose leases were up in August, and they expect to be able to turn all of the apartments within a month---it's just before the school year starts in an area with good public schools and a very short distance to Stanford. Furthermore, they are listing to new tenants at $2500+, which they believe to be the market rate, so (depending on how much they're telling the truth) we're getting a good deal.

Thanks, everybody, for all the help!
posted by pariser at 11:02 AM on July 13, 2010