So my lease is ending in 2 months time and I am currently paying above the average rental market. How do I lowball the agent in a polite way on the next lease renewal (if it happens)?
Melbourne
How to Lowball Rental When Lease Expires?
axn on 04/06/2021 - 03:29
Last edited 04/06/2021 - 09:57 by 1 other user
Last edited 04/06/2021 - 09:57 by 1 other user
Comments
- 1
- 2
When our lease was coming up for renewal 6 months ago, we negotiated a rent reduction (in Melbourne) from $540/wk to $495/wk. It took us a few back and forths (counter offers) with the landlord via the agent and standing our ground to get there, but they eventually accepted that we were prepared to move if they didn’t come to what we believed was market price. They even dropped their “best and final” when we still said no to it. We provided examples of cheaper properties of similar natures nearby, reiterated how we were good tenants that looked after the place and always paid on time, and also started negotiations at a number lower than where we ended up so in a sense we “met (somewhere) in the middle”. But really we were happy to end up there anyway.
So basically provide them with facts and be prepared to move if the negotiations don’t work out. It might take a few back and forths, but they will be open to a reduction once they realise what the current Melbourne market is really like.
I think it depends on a few factors.
I have two properties, both would be treated very differently in the scenario mentioned.
One of them has been a 10/10 tenant. Has been there for years. If they asked for a rent reduction i would give it to them every day of the week because i wouldnt want to lose them. Regarding rental demand, i am confident i could rent it out for the same its currently at.
The other place has a new tenant that has been there for under a year. I have had to deal with multiple complaints from the neighbour, this tenant is just a general pain in my ass. If this person asked for a rent reduction id say no. This place would also rent quite easily at its current rate in the current situation.
The other factor in all this is that the first property is run by a very good real estate agent. The second property has been ran by a terrible real estate agent. This makes a difference.
Some landlords will want every cent, some would rather avoid hassle of risking a bad tenant. If you have been hassle free then i would just ask for a rent reduction and present your case, you have nothing to lose asking for a rent reduction.
Some landlords are stubborn. I was in a rental for 2 years and paying way too much for the size and location of the house ($390pw, didn't have any choice at the time for personal reasons) . I kept the house clean and tidy, paid all the bills and never had any issues. There were plenty of other rentals available in the area so I offered $370pw at renewal time with some explanation.
They came back with $385 and wouldn't budge. So I moved out. It took them 6 months to re-lease the property now at $360.If demand is low I would try it and say you are happy to another lease period (not month-month).
I had friend in this situation in apartment building, a few apartments vacant on close floors. Used as negotiation and got a ripper deal on 12 month lease.
Ask for a reduction in weekly rent in exchange for signing a longer lease period.
I was in the same situation. So I found comparable places around me and sent links to the landlord, saying I would like to pay the same. Explaining if they relist the place, they will not get the same rent anyway. They will have to deal with the risks of having their place empty for some time and having a less reliable tenant than me, and dealing with the hassle of finding a new tenant.
After some resistance, they agreed.
I would never mention the place being too expensive or anything like that. The only argument is the market, how much they would get if they listed the place again.
I did this at the beginning of this year. Rentals in my area tanked and an identical unit in my building was listed at $550 while we were paying $680. Our lease had expired in November so we were on a rolling lease and they were happy to not contact us when it came up as I'm sure they didn't want to renegotiate the rent. We showed them this unit as well as other comparable places all in the $550 range and asked to have our rent reduced to $550 while maintaining the rolling lease (knowing they would refuse). Ended up going back and forth a few times and landed on $600 on a 3 month lease (which has since expired so we are on a rolling lease again).
We wanted to maintain the rolling lease structure as we are currently looking to buy.
I'm pretty happy with the arrangement. They are welcome to up the rent when the market recovers, but in the mean time we are saving $80 per week and can continue to look for places to buy without having to buy out a lease.
Pretty much same thing here. Was on month to month and kept an eye on rent listings for similar places for a few weeks when I got the feeling I was overpaying, then sent all details to my agency, politely asking for a 12% reduction based on said listings as well as some benchmark data highlighting a similar downtrend. Agency came back with a 10% reduction while remaining month to month, which I was happy with as also hoping (and slowly losing hope :P) to buy.
At the end of the day, it's a financial decision for the landlord, and assuming you've taken decent care of the place and your rent is indeed over market, there's little reason for the landlord to refuse.
I'll just point out that to maximize your chances and strengthen your "case", you need to look for a trend, rather than just a singular listing, as the latter could be a fluke or a place in worse condition than your current one, a smaller one, etc.
As a side note, you're not lowballing your agent, you're looking for a rental amount that's fair to both you and the landlord ;)
Check out this Reddit thread. https://www.reddit.com/r/AusFinance/comments/jttmgl/successf…
I followed the same approach and got a $75/week price drop.
Best way is to find like-for-like rentals and show them the price. Bonus points if its in the same building.
The first time I emailed the real estate agent asking if its possible to reduce the rent due to my income being affected by covid, they igonred me for two weeks. I went out and inspectd other similar units in the area and found them to be cheaper. So I contacted them again and told them I am inspecting other properties at the moment and I found similar units for $300 cheaper and I am going to apply unless they reduce my monthly rent by $300. First they apologized for not replying to my initial email and then reduced my rent immediately. They also became nicer and started to ask if I needed anything done or fixed at the house..
You're currently PAYING to live in Melbourne? Lol
- 1
- 2
Don’t low ball it. Lowball means you don’t actually believe in the argument yourself, ever try to sell something, does low baller ever work?
The best way is to prepare to move out. Do your home work I.e. do inspection on the apartment that is cheaper, then put it to your current landlord that you are about to move however you might consider changing your mind if they lower their rent. They don’t, you move. They do, you win. Win win.