Last year, a one-bedroom apartment in the fancier nearby neighborhood would never have gone for $1900. In 2020, such offerings were my bargaining chip. And this isn’t just happening in New York: A new study shows apartment rent prices have dropped in 41 of the 100 largest U.S. cities since the pandemic began. 

The cities with the most drastic rent decreases in order, according to Apartmentlist.com, are: 

1. San Francisco
2. New York 
3. Seattle
4. San Jose
5. Boston
6. Washington D.C. 
7. Oakland
8. Los Angeles
9. Minneapolis
10. Miami 

And Portland, Austin, Denver and Chicago aren’t far behind. 

But how do you actually obtain a rent decrease if you don’t have a pushy sister-in-law to do it for you? And how could I possibly do it for myself? (It’s always easier to negotiate on someone else’s behalf, after all.) I asked people on both sides of the equation—renters and real estate professionals—about their experience with rent decreases.

Here’s what they have to say.

Renters’ stories

Renter Jon Stenstrom in Los Angeles,California got his rent reduced  to $1650 from $1850 a month.

“With any negotiation, it comes down to leverage and the ability to walk away. I’ve always paid my rent on time and when the pandemic hit, I knew that I saved enough to weather the storm. However, as an entrepreneur, any amount that I’m not putting into my business will hurt my employees and company growth.

So with that, I went to my landlord, since I was transitioning from a year lease to a month to month with a proposition. I’d like a slight reduction in rent and will stay or you can go through the headaches to find a new tenant that may or may not pay rent on time, cause you pain, and be overall annoying.

My landlord offered to reduce my rent $200 to not deal with that burden. If she said no, I was happy to walk away as I already had a few other options to entertain.”

Renter Diana Mora in Brooklyn, New York,  got her two-bedroom apartment rent reduced to $2230 from $2530:

“It was time to renew the lease … so I referenced the current landscape, mentioned that two bedrooms are now $2,000. I asked him to come down closer to that. 

I put it off for a few weeks but knew that I needed to do it. [My boyfriend] tried and his landlord shot him down. I used a different strategy—don’t give too much info and keep it factual. Also, the tenants before me consisted of four college students, so I’ve been a dream tenant. The apartment looks immaculate.”

Diana’s landlord agreed to come down $300 per month.

What rental experts have to say

From the other side of things, Monica Palmer is an administrator in a downtown Chicago real estate office, and has been following developments in the rental market there:

“There are a number of places that rented for well below half what they would have pre-pandemic, and the rental buildings have been running … winter concessions of months free and higher commissions all summer, which is unprecedented. But that’s after steady increases for the last 10 years or more. We have more leaving before the end of their leases than usual, too. Only one guy that we work with asked for extra time to get caught up on payments. Mostly we’re sitting on a lot of vacant units with not a lot of people looking.” 

And finally, Marina Vaamonde is founder of HouseCashin.com and a commercial real estate investor. She’s decreased some of her tenants monthly rents by 10 % to 20%, and offered these tips for negotiating:  

1. Open up the line of communication with your landlord as soon as possible. If you know you won’t be able to make a rent payment and haven’t spoken to your landlord yet, you are making a big mistake. What you don’t want to do is wait until the last minute and find yourself without options.

2. Share with your landlords. Don’t expect landlords to give a blanket rent extension, abatement, or reduction to every tenant just because they asked.  Landlords will be more willing to accommodate if they are aware of your current situation. Since everyone is dealing with a slightly different set of elements, landlords will make decisions based on individual needs.

3. Be ready to state the exact amount you know you can pay each month, and how you came to that number. Once you inform your landlord of your current financial situation, make sure you are 100% transparent. This will show the landlord that you are not just trying to take advantage of the current situation without giving it much thought.

4. If you are already behind on rent, make a partial payment before you get into negotiations. You need to show the landlord your commitment to future payments. If the landlord knows that you don’t plan on moving out without paying them, they will feel more comfortable working out a discounted rent amount.

5. Knowing and expressing what it would cost your landlord to replace you with a new tenant is an important factor that should be delicately inserted into your conversation. Holding costs associated with the home being empty, realtor fees, and any upgrades required to whip the property into shape will usually push the landlord into working out a compromise with the current tenant.

While some landlords will refuse to negotiate, this is still the best time to ask,  and to find out what your landlord is made of. It’s not shameful to need a rent decrease during a pandemic that has caused millions of people to lose work. Plus, with rent decreasing all over major cities, many of us have a negotiation advantage. 

Good luck! 

The post Tips for Negotiating Lower Rent During the Pandemic appeared first on Stash Learn.

• The general rule of thumb is to never spend more than 30% of your gross income on housing—whether you rent or own. Before renting to you, landlords often expect to see proof that you make 40 times your monthly rent annually—it’s the same calculation as 30% of your gross income. (We’ll show you.)
• To cut down on costs, consider getting a roommate, or roommates, to split rent with you.
• If you know your housing costs will exceed 30% a month, find other areas in your budget where you can cut back. For example, take public transportation rather than owning a car. Reduce dining out, or stop impulse spending.
• Look for rentals where utilities are included, as that can help you conserve cash.

Consideration: If you have a lot of debt, your monthly rent plus your other loan payments shouldn’t exceed 43% of your monthly income. You may have to seek cheaper alternatives if it does.

Let’s break it down:

If your gross pay is $3,000 a month, you should pay no more than $900 a month.

To put another way, if your rent is $900 a month, your annual income should be at least $36,000.

Jargon Hack.

What is gross pay?

Gross Pay

Gross pay is the amount you get paid prior to taxes being taken out of your paycheck.

Find out

Jargon Hack.

What is a security deposit?

Security Deposit

A security deposit is money you need to put down prior to moving in to a rental, usually in addition to your first month’s rent. It’s protection for your landlord against your not paying rent, and property damage. You typically get your security deposit back with a small amount of interest when you move out.

Find out

While the 30% rule should be your goal, remember there is a well-documented shortage of affordable housing in the U.S., and nearly 40% of renters in the U.S. spend more than 30% of their income on rent, according to research. But doing what you can to get your rent costs down will only help you in the long run.

The post What It Means to Rent What You Can Afford appeared first on Stash Learn.