Negotiate rent with your landlord to reap savings
Imagine what saving $100 or $200 a month on rent could do for your finances. You could invest that money toward retirement, pay off debt, fund your child’s RESP, buy ergonomic equipment for your office, earmark funds for a new computer or build your emergency cushion.
Negotiating rent can be done, and it can be extremely helpful to your finances.
In many places in Canada, COVID-19 has put downward pressure on rental rates (especially in densely populated condo communities), which means now could be an excellent time to get your rent adjusted downwards as well, to match the market.
I’ve been on both sides of this equation; as renter and landlord. And the number one key to a successful negotiation between each party is good communication, without a lot of emotion. Here are a few pointers to approach the conversation with your landlord.
Know your number
Before you set up a virtual meeting with your landlord, you should be clear on the rent you’re going to be asking for. Otherwise, your landlord is going to set the rent for you, and in almost every case they are going to do what they can to maximize their profits. Do an online scan of market rent rates for comparable properties, and if you have a friend who is a local realtor, a quick call to them will help you understand what they are seeing for rent rates, too.
I’d also recommend googling the latest real estate news as this will let you know what’s happening in the rental market. For example, rent rates in Toronto dropped more than 16 per cent during 2020 but are expected to rebound later in 2021. In Calgary, rental rates softened 6 per cent in 2020, are continuing to decline each month, and are not expected to rebound until after this year.
Offer something to your landlord to make it worth their while
Besides reminding them that you are a great renter, reliable and clean, you may be able to offer them a longer lease term, their parking spot back (if you’re not using it), small home improvements or maintenance if you are a handy person, splitting a portion of the utilities, referrals for other vacant properties they have, and so on. Seek to understand what your landlord needs most, and see if you can offer it to them.
Keep the conversation upbeat and brief, but firm
When you’re speaking with your landlord, it’s important to be polite, but lay out the facts and your “ask” clearly. Getting heated will work against you. Try this…
YOU: I love the neighbourhood and the property and would love to stay. But rents have come down across the board and it’s important for my financial health to save money on rent.
LANDLORD: Glad you like the property. What are you hoping to pay for rent?
YOU: I’d like to pay the current market value for rent, which based on my research is $2,100.
LANDLORD: OK, so you’re asking for a $300 savings, is that correct?
YOU: Yes. And, in exchange I would be happy to fix up the fence this summer on my own accord as a gesture of goodwill.
LANDLORD: That’s kind of you. I’ve also done some research and it looks like the market rates have come down only $200. You’re asking me for a savings of $300. I’d be happy to match the market rate of a $200 discount, but nothing more. I’d also like to have a 12-month lease commitment from you in exchange for this savings. Are you willing to agree to this?
YOU: Can we make it a six-month lease with $200 savings?
LANDLORD: I’ll think about it and get back to you in 24 hours.
That’s it. Taking a moment at the end of the conversation for both parties to think about the counter-offer is important so that you can each digest the details, and determine if it’s the right deal for you both to proceed on. And, if it doesn’t feel right for you to continue to rent from your landlord, ensure that you’re factoring into your budget the full costs of moving somewhere else. Sometimes moving out IS the right move, if your landlord doesn’t want to budge on rent and you’ve been able to find a much better deal elsewhere.
I totally get that negotiating with your landlord might feel a bit weird, but by practicing these kinds of conversations a bit more regularly, like negotiating a price on Facebook Marketplace or asking your boss for a raise, you’ll feel more confident and prepared. Just remember, what’s on the line could be thousands of dollars in savings from reduced rent, which is HUGE when it comes to your finances.
This article was originally published in The Star. Lesley-Anne Scorgie is a Toronto-based personal finance columnist and a freelance contributing columnist for the Star.
