Do I save by moving into my apartment in the winter rather than the summer?

September 20, 2012 4:05 PM

Apartment lease economics: I'm planning to move to a new apartment. I'm considering waiting until winter to move in, because leases are cheaper in the off season. But will my rate just go up when it's time to renew a year later?

In my city, apartment prices are seasonal: they peak in the summer & early fall because of high demand, and then in the winter, they drop since not as many people want to move in, and landlords don't want vacancies. So, instead of moving into my new apartment now, I'm thinking of waiting until the winter, when I'll be able to score a cheaper lease.

For example, if I get an apartment in September, I might get offered an annual lease at $1400/month, but if I wait until December, that could drop to $1300/month, yielding a $1200 savings over 12 months.

That part is straightforward to me. But it seems the savings might actually extend beyond the first year, because landlords are telling me that my lease price for the second year is based on market prices at the time of renewal.

Assuming I'm on an annual cycle, it seems like it would be extremely advantageous to start my initial lease during the winter, because every time my annual renewal comes around, it'll be off season again, and I'll once again reap the benefits.

Continuing the example above, this would be like the following (for the sake of simplicity, assume everything stays constant from year to year):

December 2012: $1300/mo
December 2013: $1300/mo
December 2014: $1300/mo

versus:

Sept 2012: $1400/mo
Sept 2013: $1400/mo
Sept 2014: $1400/mo

Am I correct in perceiving a long-term advantage to moving in the winter?

posted by lunchbox to Work & Money (3 answers total)

Many leases switch to month-to-month after the first year, and the landlord can often raise the rate at more-or-less any time (depending on the terms of the lease and local laws, of course). If you want to keep getting the cheap-winter-rates bonus, you may have to renew the lease for a full year at each anniversary, rather than allowing it to go month-to-month. And that's a double-edged sword: if you're a good tenant, the landlord may like to have you locked in for a year, but will likely realize that locking you in in December means he can't raise your rent next summer, or kick you out and get somebody at a higher rent for a year.
posted by spacewrench at 4:11 PM on September 20, 2012

A friend just moved to a city with a lot of students where housing prices peak in the early summer. Every single landlord she spoke to was unwilling to give a year long lease in September (although she is a working adult, has good credit & good salary, & wants to live somewhere for a year); she's only been able to get 9 month leases, because the landlords want to lease it in June for a higher price.

So yes, you are correct; but there's no reason that someone will write you a year long lease in December.
posted by holyrood at 4:55 PM on September 20, 2012

I don't know if this is answerable without knowing what city you're in, and maybe not even then. In Boston, for example, which has the same seasonal variation you describe, you'd get an 8 month lease in December to put you back on your September 1 cycle that everyone else is stuck on, and you'd probably end up paying market rates for your next lease. Or maybe not; it totally depends on your landlord. I'm paying below-market right now and would have paid more if my landlord had asked, but I was just lucky that she did not.

I think you should take the savings now where you can get them and take any benefits that come when the lease runs out as a windfall.
posted by Aizkolari at 5:17 PM on September 20, 2012