How can I negotiate rent increase?
December 12, 2017 10:12 AM   Subscribe

I need advice on what exactly will play a higher argument to my discussion on the rent situation. What other factors play a role in negotiating rent with a tenant?

I live on the border of Washington DC and Maryland - my rent got increased to 4% for the next 12 month lease term and I and planning to meet with the property manager to discuss whether it can be negotiated. Several websites outline finding out what are the prices of the other properties in the area, I am also wondering what else I can utilize. I am actually willing to move out of my apartment because I feel like I can find better properties else where, but due to the hassle of moving, I prefer not to. What other information specific to this situation could help?
posted by proficiency101 to Home & Garden (11 answers total)
Do you live in a building with several units? If so, are there vacancies? If there are vacant units, that almost certainly plays to your advantage.

What is your best-case outcome?
posted by GorgeousPorridge at 10:48 AM on December 12, 2017

I live in Chicago, in Cook County.

I can look up the public records documents for my building using my county's online search tools: the deed, mortgage transfer documents, etc are all there. I can also look up the property tax assessment through the county assessor's board website.

With this info and some napkin math I can get a rough estimate of what my landlord is out of pocket per month for my apartment, add in my judgment for how well repairs and maintenance are handled, and compare that number to what I pay in rent.

That gives you a negotiation window.
posted by phunniemee at 10:50 AM on December 12, 2017 [1 favorite]

What other information specific to this situation could help?

Get the area's apartment vacancy rate - if it's high, you can leverage the fact that this increase is enough to make you move to point out that that losing a consistent paying tenant with the vacancy rate high is likely to grossly outweigh the benefits of a 4% rent raise.

Some math - a $2000/month apartment with a 4% raise will net $960 more in the landlord's pocket in 12 months, however even a two-week vacancy eats away that whole increase and more. The landlord will have to weigh how much risk $960 is worth to them.
posted by notorious medium at 10:56 AM on December 12, 2017 [1 favorite]

Im not saying you shouldn't do this, and your willingness to find another apartment is your single biggest asset going into the negotiation, but I want to propose an alternative perspective - inflation is at about 2.2% right now which means that (very broadly) your landlord would lose profit by keeping your rent flat. While her/his mortgage is probably locked in, the other costs of operating your building are increasing, and expecting the landlord to just eat these increased costs is not entirely reasonable.

You could offer to split the difference, accept a 2% raise consistent with inflation and propose a scenario in which everyone gets something.
posted by Exceptional_Hubris at 11:16 AM on December 12, 2017 [4 favorites]

I think the #1 thing you can do is have an idea of those comps, yeah. It shouldn't be hard to do with a craigslist or padmapper search. Not only will that potentially give you a point of argument, but it'll also give you a reality check on whether your expectations for rent are in line with the market - it is a pretty hot market, so there's a chance they aren't.

Anecdata: I'm in DC too and my last building (a big managed building) increased my rent by 6% last renewal. I thought it was too steep, so I moved out, but I know the unit did get rented for what they were asking. Now I'm in a condo building with an excellent and laid-back small-time landlord who has a history of not raising rents at all - but small-time landlords are always a crapshoot, as I understand it.

What else can you do? You could offer to sign a lease for a longer term, although that might not be in their best interest if the market is rapidly increasing. You could offer to pay several months (or even the full year) up front in exchange for a discount, if that's something you can afford. If you have skills (plumbing? yardwork?) that would be of use as a barter to the building owner, you could inquire about that. Otherwise, if you think they're asking more than market rate, unfortunately your best option is to move.
posted by mosst at 11:18 AM on December 12, 2017 [1 favorite]

Oh - you could also consider trying to negotiate some perks or upgrades (any iffy appliances? does it need repainting? deep carpet cleaning? efficiency upgrades like a smart thermostat? etc.) if you decide to stay in the unit, as a condition of lease renewal. That really depends on your landlord and what you value from the relationship, though.
posted by mosst at 11:21 AM on December 12, 2017

Do you live in DC? Is your building older than about 1978? (not sure of the exact cutoff). If so, congratulations, your apartment is rent controlled!

If that's the case, the landlord is limited to raining your rent by CPI +2% annually, and is prohibited from higher raises to make up for foregoing previous years' increases. They can apply with the DC Office of the Tenant Advocate for a higher increase, but the tenant can appeal.
posted by foodmapper at 12:32 PM on December 12, 2017

+1 vacancies, I've successfully pointed out that my building is never at 100% occupancy and that my on time rent payments are also at 100% and am probably the single lowest rent payer in my neighborhood. But I also probably have the oldest semi-working appliances. Pretty sure they are all my age or older. So it's a trade off.
posted by one4themoment at 2:24 PM on December 12, 2017

(based on conversations with past and present neighbors, the going rate for my unit is >1000 but I'm still paying in the 700's)
posted by one4themoment at 2:28 PM on December 12, 2017

Mentally prepare yourself for a move, some landlords will not negotiate at all, even if it's not in their best interest. Or run the math to figure out if you're willing to eat the increase.

A previous corporate landlord would not negotiate at all even with several identical empty apartments to mine for 40% less. They offered to give me the other rent if I moved across the hall, I moved out instead of having to deal with the rent being raised every year.
posted by TheAdamist at 3:21 PM on December 12, 2017

... meet with the property manager to discuss whether it can be negotiated

It's OK to take a stronger position for your initial conversation. When you ask to setup the appointment, ask to "discuss my lease renewal" or something like that. Your conversation won't be about whether you can negotiate the lease (the landlord would certainly like to end it by saying "no, not negotiable" right there). Your going to discuss it, and there may be some negotiating. Totally normal.

When you have the discussion, you'll have the best chances if you can feel prepared and confident about a few key points:

- Your target price. What's the rate that you'd sign right then and there? Is it your current rate? A 2% increase?

- You have another option that's better than agreeing to 4%. It doesn't have to mean you find an identical apartment for much less, just that you've found something else that is a better value to you.

- You're prepared to move if you have to. Make sure you know all the notice dates, and therefore how long you have to negotiate.

The landlord might be very confident in their position and tell you right there that there's no chance they'll agree to less than 4%, because they're confident that they can get a new tenant to pay 6% more. Assuming you have some time before you would need to give notice, you can take a position and ask them to let you know the next day if they're able to work with you.

You can always back down from your initial position and sign the original lease, or whatever alternative offer they may have provided.
posted by reeddavid at 11:09 PM on December 12, 2017

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