Asking for a Rent Reduction Due to Market Changes

sparkanum on 24/05/2020 - 15:37
Last edited 24/05/2020 - 15:38

Was reading the SMH article this morning about rents dropping (https://www.smh.com.au/national/nsw/a-very-good-time-to-upgr…) and out of interest had a look to see if our area was impacted. Quickly found 5 ads for apartments similar to mine in my apartment building going for $80-$120 p.w. cheaper than what I'm currently paying (~~15% off). A quick check confirmed that until recently their rent was similar to what I was paying (e.g. one had been rented out last year for the same amount I'm currently paying) suggesting it is a market drop.

My question is: would it be wise for me to approach the landlord for a rent reduction? And/or would I be a jerk for doing it?

For background: we've been at out current place for a number of years, and normally on 12-24 month leases. Our current lease ran out a few months ago, and the landlord didn't reach out to renew the lease (they did something similar a few years ago and we had to push for a new lease). I believe we're good tenants; never late on payment, no complaints that I know of, no issues from regular property inspections.

We like our current place, and know that it's a reasonably good fit for our needs (i.e. other apartments in the area / building aren't quite as well suited for us specifically). While it might seem like a no-brainer to ask, I'm concerned that we ask and the landlord just decides to boot us. The downsides of other apartments wouldn't be worth $80-$120 p.w. by any stretch of the imagination, but it would be annoying having to move into a slightly worse off place even if it meant saving that much money.

I'm also wary that I'm fortunate enough to not have employment or financial worries at this stage, so it's not like I'm in desperate need of a rent reduction - so not sure if I'm being a jerk by essentially manipulating the downturn in rents to my advantage.

I was considering just reaching out to get a lease renewal and hoping they do the right thing by offering a rent reduction - even if it was a part amount as a gesture of goodwill. But not sure how realistic that is or whether I'm just being naive to think they will.

Any thoughts on what to do would be appreciated.

Poll Options

  • 79
    Be forward and ask for a rent review
  • 1
    Ask for a lease and hope for the best
  • 0
    Don't risk it; keep paying as-is
  • 27
    Don't be a jerk; keep paying as-is
  • 4
    There's a better option you haven't thought of (add in comments)
Home & Garden

Comments

    • sparkanum on 24/05/2020 - 15:54
      +2

      Thanks for the comments; I was expecting people to brush away my 'being a jerk' argument as me being too sensitive. It's good to know I'm not overplaying that aspect.

      Re: "boot on the other foot", we were keen to have long-term leases, but the landlord a few years ago was all of a sudden not. We suspected at the time that this was because the property market was heating up - so they wanted us on a periodic arrangement so they could raise the rent more freely as it went up. We also think this is why we're currently on periodic; when the last lease expired, they may have seen it as another opportunity to do this (this was before the current market situation was apparent!). If that's right, then the boot/foot argument is playing out for them at the moment…

    • nomoneynoproblems on 24/05/2020 - 19:40
      +2

      Grateful for what? If anything the landlord should be grateful for having a tenant. It's a absolutely a renters market (for once) and last I checked this was ozbargain. I'd definitely be seeking a rent review, tbh you'd be silly not to.

      • [Deactivated] on 24/05/2020 - 19:53
        -1

        Or you could just rent a place 20km further out for less rent and enjoy the longer travel to work when it begins..

  • megaalc on 24/05/2020 - 15:49
    +8

    i just toook screenshots/web links of similar properties for lower rate , sent it to my REA and asked whether it is possible to match … he then asked landlord and landlord agreed to reduce and match

    • sparkanum on 24/05/2020 - 15:56

      Thanks, I've taken screenshots but was a bit anxious about how it would play out. Is that something you did recently or was this a pre-COVID example (out of interest)?

      • megaalc on 24/05/2020 - 16:00
        +4

        first time did it last May, second time - month ago
        total reduction = 12.5 % of initial rent
        renting this place since 09/2017

        • sparkanum on 24/05/2020 - 16:01

          Thanks! That very helpful to know.

  • [Deactivated] on 24/05/2020 - 15:51
    +1

    Guess depends relationship with owner

    • sparkanum on 24/05/2020 - 15:57

      We have a REA inbetween, so have basically no relationship with the owner. Our REA leaves us alone most of the time, probably because we've been long term tenants without issues or late payments.

  • sir_bazz on 24/05/2020 - 15:53
    +1

    Why not start a discussion with your landlord?

    Make the same case you made here and see what he/she has to say?

    Worst thing that could happen is that the dialogue turns ugly and you choose to move to one of these more affordable rentals.

    • sparkanum on 24/05/2020 - 16:00

      Thanks. Might be superstitious, but it is generally my luck that the second I do something like this those more affordable alternative rentals will suddenly be filled and there'll be no good options at the time I need them. So 'the worst thing that could happen' in my view is that we lose the thing we like, and end up in something we don't like even if it's for less money.

      • Never Pay RRP on 25/05/2020 - 17:24

        They are very unlikely to kick you out just for asking (unless you make rude ultimatums). Go ahead and ask nicely, hope it works out well for you

  • elgrande on 24/05/2020 - 16:03
    +7

    If you don't ask you don't get.

    Be polite, show examples and be prepared to move on if it does not work out.

    • sparkanum on 24/05/2020 - 19:59

      Cheers. I think I'll probably go this way.

      • TimeAndMoney on 24/05/2020 - 20:45

        It may be a good idea to revise the rent at this stage

    • sparkanum on 24/05/2020 - 16:18
      +2

      Thanks, useful perspective. I agree that I shouldn't be upset if they say no.

      Re: entitlement, from my perspective I am already paying a higher rent (than the market), and was proposing to continue doing so rather than leave and have them lose out more significantly. Are you saying it would be entitled for me to hope they'd offer a midway option? Or are you suggesting it's entitled for me to see the current market price is a not a 'fair' price?

      (genuine question)

      • ozhunter on 24/05/2020 - 18:39
        -5

        Maybe entitled was the best way to describe it. But saying hoping they do the right thing by offering a rent reduction - even if it was a part amount as a gesture of goodwill. is just stupid/ridiculous. It's like your almost saying that he is obligated to help you out and it is morally wrong if he doesn't.

        As for asking a reduction in rent? You definitely should. It would be unwise to not get the best price possible. You aren't in a contract. You should negotiate it down as much as you can.

        • sparkanum on 24/05/2020 - 19:56
          +2

          Thanks for clarifying. I suppose I should have said something like "the thing I want" rather than the "right thing", as I'd agree it's not morally wrong if they don't offer.

          Alongside past rental increases/lease renewals the REA has usually stated something like "after comparing with similar properties in your area, we've decided to increase your rent by $x to match the current market". I suppose I was under the impression that this should work both ways (ie decreases and increases). But you're right that's probably naive to think they wouldn't aim to maximise rent.

  • tsunamisurfer on 24/05/2020 - 16:47
    +3

    Rent is like almost every other commodity.

    A buyer can offer a low price, if the seller believes he cannot get a better price, seller will likely sell. If the seller believes he can get a better price then he will tell the buyer no.

    As the OP seems to be on a month to month arrangement, he/she is within his rights to ask for whatever rent reduction he wants (there's no entitlement to it), but the LL is well within his rights to say no and look for another tenant.

  • Hardlyworkin on 24/05/2020 - 16:48

    I'm in much the same boat as you although I think we can find a place we like just as much for a similar discount.

    When we got our place we paid above market as we needed something right then. I think it's worth $50 a week less now.

    Maybe I'll risk being a jerk and ask for a reduction too.

  • twadds on 24/05/2020 - 17:44
    +3

    Definitely ask for a rent reduction, when market rents go up you landlord will send you through a rent increase. When market rents are down they should expect they need to accept a lower figure.

    If you moved out they would have to lower their asking rent to get a new tenant.

    There's nothing entitled about asking not to pay above market rent for your place.

  • capslock on 24/05/2020 - 18:34
    +1

    I think that you have the power in this negotiation.

    Edit: The landlord could potentially say that they lost their job and your rent is their only source of income in which to feed their entire family and asks you to reconsider your request.

    • sparkanum on 24/05/2020 - 19:57

      I think if they said that then I wouldn't be looking to change the rent. But if they're in a similar position income wise to me then it's fair game as far as I'm concerned (ie they took the risk of investing, I took the risk of renting, and this time it's in my favour rather than theirs).

  • [Deactivated] on 24/05/2020 - 18:36
    +8

    Ask.

    Be prepared to get a no.

    If no, decide if you will move out at end of lease or just carry on.

  • workhappens on 24/05/2020 - 19:54
    +4

    I doubt they would kick you out just for asking. What is the point of kicking you out for asking for a lower amount when any new tenant would be asking that lower amount anyway? Add this to the potential loss of a few weeks income over whatever they can claim back from landlord insurance, then it's totally not worth it from the landlord's perspective.

  • MeagerDollarBucks on 24/05/2020 - 19:58
    +1

    I just reduced my rent by $160 per week.
    You won't know unless you ask.

    • kyle on 25/05/2020 - 08:29
      +1

      From what though?

      • MeagerDollarBucks on 25/05/2020 - 09:14
        +1

        Not really relevant, my rent was on par for my location, size, age and condition of the house. I asked for a reduction and the landlord accepted without question. He'll get it back through landlords insurance so he's not really at a loss.

        • kyle on 25/05/2020 - 10:12
          +1

          Voluntary reduction agreed to by both parties is not usually covered by landlord insurance.

          • MeagerDollarBucks on 25/05/2020 - 11:19
            -2

            @kyle: It was claimed as COVID related and as such claimable by his insurance.

  • pritu1806 on 25/05/2020 - 10:37

    Very similar situation here. Renting same place for last 3 years and were supposed to relocate elsewhere, hence have an end date to job as well.We just need 8 months more. Flip side, if landlord does not agree, will end up paying for cleaning relocation to newer place.

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