How to Negotiate with Your Landlord

Last week I received a lot of emails  asking for more information on how we tripled our savings rate from 20% to 60% in less than a year. One of the themes I noticed, was questions relating to negotiating rent with a landlord. The time we spend on our lease yielded a $2,400 return, so I’m happy to detail our experience. This is how you negotiate with your landlord!

First off, there isn’t one factor that leads to a successful negotiation. At the end of the day, negotiations are between people and so there a hundred factors which all need special care and attention.

As mentioned above, I feel negotiation is a very powerful tool we can all utilize more often. I’m a firm believer that success is highly correlated with the number of crucial conversations we are willing to have.

The trick of course is having that conversation in a non-confrontational manner that does not burns bridges.

It truly is a skill at the end of the day, but once we learn it, it can pay dividends for many years. We benefited with a $2,400 gain in this scenario, but I know we will have future negotiations that will yield even higher results.

Know the right time to negotiate.

When it comes to negotiating rent, the WRONG time is when both parties are ready to sign. Too little, too late. AND you’ll probably upset the other party as it shows you’re trying to get away with a better deal at the last possible moment. We wanted to be respectful of everyone’s time, and as such, we took the opposite approach.

We had a game plan in place when we first viewed the place. We scheduled a time to visit as soon as the landlord was available even though it was inconvenient to our schedule. We were prepared and had the landlord walk through every question we had. We connected over our backgrounds and established a basic connection, so we knew we would work okay together.

Lastly, before we left that day, we expressed deep concern over being able to afford the place. We wanted our landlord to see that we were a great fit, but that the price might be too high.

That very night, we prepared the lease with our negotiated rent and sent the landlord two potential options, already signed and ready to go. We prepared all the documents needed for her to complete a background check and credit check.

We handed her the offer on a silver platter, albeit with a change in the rent amount. 🙂

Our ability to immediately fit into her schedule, while being friendly and open about our backgrounds, left the landlord with a lot of positive feelings towards us. At times, part of the negotiation is being liked by the other side so that they want to do business together.

Be Prepared.

What isn’t mentioned in our story above is that we had already been to a few places in the area. We knew what was considered a good price and we knew what was considered a laughable price.

Knowing the numbers can be difficult, but luckily we live in the information age where we can fully research an area online within 15 minutes.

Be Willing to Walk Away.

We absolutely loved the place but we were careful not to show just how much we loved it. Of course, we would have gladly paid the full price, but we knew we could save thousands on rent and had to pursue that avenue.

Where negotiation is concerned, I’ve always liked the famous author Steven Covey’s approach. He described it as striving for a win/win (mentioned below), but he added the extra bit of “win/win OR walk away.” I absolutely agree.

Give the Landlord Options.

In our case we actually handed the landlord two offers. One was for $200 below the rent amount for a term of 12 months. The second offer was for $100 below rent for a term of 24 months.

Find the Win/Win Scenario.

In our case, by offering two options, we feel we would find a win/win scenario. Asking for $200 less on a one year lease WITHOUT offering a 2nd option feels to me like a win/loss scenario if our landlord accepts it. She might have felt like she was backed into a wall without another option.

Instead, by offering the 2nd option of only $100 less, she was able to arrive at a number closer to what she originally wanted. We also benefited because we would not see a rent increase in our 2nd year.

So while we saved $2,400 up front, we might have saved closer to $3,600 at the end of the day, assuming she would have raised our rent by $100 in the last 12 months.

Don’t Reject Yourself

This subtitle could also be called, “Don’t be Afraid to Ask,” because that’s the first response I hear when I bring up this approach to friends and family. I hear the laundry list of excuses.

Don’t say no to your own idea before you even given your landlord a chance to tell you no.

“My landlord won’t budge on the rent. He would never go for…”

“Our landlord is the worst. I wouldn’t even want to have a single phone call with…”

“Sure! That worked for your landlord, but our landlord is an attorney and she’s super smart and wouldn’t…”

If you offer a negotiated rent in a respectable manner, then the worst case scenario is a simple, “no.”

In conclusion, I hope that clears up our approach and helps you negotiate with your landlord!

Have you negotiated your rent? Or salary? Or anything that led to big financial gains in your life?


11 comments… add one
  • Mrs. Picky Pincher Jan 23, 2017, 9:06 am

    I feel like it’s easier to negotiate on the cost of rent if you have an actual landlord and not a property management company. The companies have HQs and many of the rates are pretty set in stone. Normal ol’ Joes with rental properties have more flexibility to meet you halfway.

    • Distilled Dollar Jan 23, 2017, 10:37 am

      Agreed as long as we give it a shot.

      I followed this stategy in college with a leasing company. I was one of probably hundreds of tenants they managed. My simple pitch was, “lower the rent by 50 and I’ll stay another year.” They agreed since the cost of finding a new tenant plus cleaning fees to prep for the new tenant must have been <$600. That was a glorious day when they said yes since $600 goes a long way on a college budget. 🙂

  • Jax Jan 23, 2017, 10:01 am

    “Don’t be afraid to ask.” SO TRUE. One year our rent was going to increase to an amount that we were unwilling to pay. We contacted our leasing agent and told him we loved the place and wanted to stay but the proposed increase was prohibitive for us. They lowered it to a much more reasonable $15 increase and we stay another year. I’m sure it was more cost effective for them to accept a lower monthly rate than have to clean and flip the apartment and it worked out well for us.

    Similarly, when my partner and I were first looking for a home to move into together, a house we really loved opened up but said they didn’t accept cats. My partner was ready to keep looking, but I called the landlord and told him about my indoor cat, how she was up to date on shots and how I would pay an additional pet deposit. He accepted and we lived there happily until we bought our own place.

    It never hurts to ask, and like you said, it’s easier to get if you offer alternatives and show yourself to be reasonable and responsible.

    • Distilled Dollar Jan 23, 2017, 10:39 am

      Awesome job and great to hear the positive result!

      I feel a lot of people might ask for one thing and stop once they hear no. If you offer up alternatives then I’ve found my success rate goes close to 100% on these types of conversations.

  • Financial Coach Brad Jan 29, 2017, 1:19 pm

    Oftentimes “if you don’t ask – you don’t get”. Definitely be willing to ask for a break.

  • Laurie Feb 3, 2017, 6:48 am

    I have never tried to negotiate rent, but it isn’t a bad idea. I like how you proposed two different options to the landlord. It really doesn’t hurt to ask. Great tips, thanks for sharing!

  • Howard Feb 14, 2017, 5:16 am

    I definitely agree that by knowing the average rentals in a certain area, tenants might be able to negotiate a slightly lower rental fee. So once again, renters, do your homework.

    However, the rent fee is not the only thing that might be negotiable with landlord.
    Pet fees, security deposit could be slightly lower if manage to agree with property owner. Parking laws & guest policies could be more suitable for you.

    For instance, you may be able to negotiate a slightly lower security deposit by signing a longer lease with the landlord or paying for a few months in advance. Or it you have good credit, you can offer amount of security deposit via Web. The platform allows to do it.

    • Distilled Dollar Feb 14, 2017, 7:38 am

      Those are great points! I’m not familiar with the platform you linked, but I’m glad you mentioned all the other misc. fees/costs associated with living as a renter.

      A while back (few years ago), I heard a tip about paying for months of rent upfront with the promise of receiving a full month for free. In the particular example I saw, the person paid a full 5 months of rent and received the 6th one free. I didn’t mention this in the post since it seems very risky and very dependent on knowing your landlord and tenant laws.

      Thanks again for the tips!

  • Steven Goodwin @ MyFamilyOnABudget Feb 16, 2017, 7:39 am

    When my wife and I were looking for an apartment, we looked at quite a few places and knew pricing and what we could get from it. When we finally found a place, we knew the neighbors and what they were paying so we were able to negotiate the same price which ended up saving us over $200/month over the 6 years we were there!

    We regularly met with the landlord and were always on time with our payments as he had trouble with other tenants. He did a great job addressing all of our needs and it was a great relationship! You pointed out some wonderful points that I could pass along to future renters though!

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