Renter’s Market Opens Door to Negotiationsby Tim Manni
Despite mortgage rates near 5%, tight credit conditions have certainly discouraged the potential of a buyer’s market. For the first time since 2003, rental rates have dropped nationwide. In the fourth quarter of 2008, rentals dropped by 0.4%, while apartment vacancies rose to 6.6% from a year earlier. Welcome to a renter’s market.
The ongoing recession combined with increased vacancies have allowed some renters to re-negotiate the terms and conditions of their lease, and sometimes even lowering their monthly payments:
“Owners realize that there isn’t the job growth necessary to sustain high demand for rentals, and they have to be much more realistic” about price, says Daniel Baum, chief operating officer of the Real Estate Group.
But even in a positive climate for renters, there are steps people should take before trying to renegotiate a lease. Mr. Baum of New York’s Real Estate Group suggests seeking out evidence of similar apartments in your neighborhood that are being rented for less. Present these findings to your landlord to bolster your case for a lower rent.
Renters who have a good history of paying their rent on time can also try to re-negotiate their monthly price by agreeing to a lease extension. Agreeing to stay in your apartment for another year provides your landlord with concrete financial security.
While steep declines in rentals have been particularly evident in large metropolitan areas, they are certainly not limited to them. If you feel like you’re paying too much each month, realty professionals suggest talking to the owner of your building. Yet, don’t come on too strong unless you’re willing to pack your things if the negotiation doesn’t work out the way you planned.