When Negotiating Rent, You Must ...
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As the economy grows, price on goods and services will eventually increase. That said many people, especially young adults can't afford to buy a house due to limited purchasing power. Therefore, the alternative is to rent a place to stay. Ideally, landlords would like to list a higher rental price to ensure it covers the property's loan which means higher rentals for you. That said, there is certainly room to move. Lowering your rental is possible, provided you know how to negotiate.
First of all, we should know that as possible tenants it is our right to negotiate the rental price. Both parties should get the best value possible out of the property which means savings on your side and paying off the loan on the owner's. Getting your rent down from RM600 to RM500 over the course of 12 months means you have saved a total of RM1,200 for the year. So, how do we bargain without sounding "awkwardâ€? When it comes to negotiating keep in mind that this is not limited to dollars or ringgits, things like time, amenities and other benefits are perfectly up for negotiation.
People tend to skip the "negoâ€ part of the negotiation and go straight to the "initiationâ€. The fact is it is not as clear-cut as buying a bag of chips. There is still room to move but you must be aware and willing to explore some ideas.
Do your research
We can start by researching the rent and facilities provided in the neighbourhood especially leases that are charging a similar rent. The more information you have, the more likely you will be successful in negotiating since you know what your expectations are. By curating all the information gathered from your research, you are granted more confidence as you know what is reasonable to ask for.
Ask your agent
The best and easiest way to engage in negotiations is to let your agent do the talking beforehand. A good agent will be more than willing to help you get the best deals. However, keep in mind that agents are also gatekeepers to the interests of the owners. Once the ball is rolling, ask your agent if a meeting can be set up between yourself and the owner, you are more likely to get a positive outcome face-to-face.
What to negotiate
As was mentioned before, this is not restricted to just the price of the rental. There are several options for us to negotiate, for instance:
1. A free parking space
Commonly parking spaces are considered as a given and no one bats an eye. However, parking can be a good leveraging tool. If there is no parking space readily available or you are required to pay for space, request for a reduction in rent. If there is space and you don't need it, rent it to someone else in the building or let the owner have full control over it and shave a few bucks off your rental.
2. Upgrades to the apartment
Most often than not, people move in as is and make due with shortcomings like old furniture, rusty pipes, cracked floors and even broken windows. List these things down and send it to your owner. More often than not, you will be surprised on how obliging they will be to do the repairs and replacements for you. If they refuse, calculate how much you'd have to fork out and again, use it to leverage for a lower rental.
3. Payment of utilities
Your future landlord might not be too keen on lowering your rent as much as you'd hope but you might find some luck requesting to bear the utility bills instead, which is a fair deal if you ask me.
Negotiate your lease
Rather than hoping that the price of rent can be reduced, we as tenants can take initiative and offer some options that are more appealing to the owners:
1. Sign an extended lease
This may become a double-edged sword if you are not clear on the terms. Instead of leasing for 2 years straight, opt for 1 year with an option to extend for another. This way you extend your lease without actually extending it because you can opt out if it if is not working out for you â€“ or renegotiate the terms once the first year's tenancy is up. On the other hand, owners will always be happy to get a possible long-term tenant in their unit and bypass all the hassle.
2. Prepay months in advance
Owners will definitely appreciate this and may be convinced to lower down the rent. It is a highly effective solution to cheaper rent but you will, of course, be required to pay a hefty sum upfront.
3. Agree to keep everything proper
Promise the owner that you will not smoke in the apartment, keep the walls clean, no parties, no animals â€“ you get the point. Better yet, don't promise but make it a legally binding. It is one thing to say it, another to have it in writing. These little things might seem ordinary and plain but owners might appreciate your dedication to keeping the unit in tip-top condition enough to lower your rental and save you some cash.
4. Structure a buy clause
If you find that a unit is a place you would like to own someday, why not initiate the process earlier. You can agree with the owner to lock in the unit's price for when you finally decide to buy it or pay a higher rental that goes toward your 10% deposit. There are multiple ways to structure the terms but owners will be happy to discuss this option, provided they are willing to sell off the unit in the first place.
So there you have it, some handy tips to keep in mind when out hunting for rentals. Do not be afraid to negotiate but do not go overboard and keep it friendly, please. Having a good relationship with your landlord is just as important if not more so than saving on a couple of bucks. With that, happy hunting, happy negotiating and happy tenanting.