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How to negotiate with management on lease renewal?
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Hi all,

I have a large apartment that I share with roommates in a non-prime area of Brooklyn. The lease is up at the end of July, and the management company has sent me a one-year lease renewal a couple of days ago, with a small bump in the rent.

My questions are:
1. When should I begin my negotiations?
2. How should I negotiate with them? Email? (They’re generally responsive). Phone? In person?
3. Should I make a counter-offer to their slight increase from last year? Should I tell them that I will leave unless they lower the rent? Other ideas? Based on a very preliminary search on Craigslist, the rent is comparable or a bit high relative to what’s currently being offered.
4. If I would like a longer lease (2 or 3 years), how would this affect the dynamics?

If anyone has any specific questions, I can certainly answer them, but I left certain details out not to muddle the conversation, and so that the information can be useful for others who may not be in my exact situation.

Thanks very much for any thoughts or suggestions!!

bump

Ignored comment. Unhide

Thanks NYCMatt! How do you think the length of the lease should affect the price? Say I'd like to stay here for 2 or even 3 years vs. 1 - do you think that would increase or decrease the $ amount?

Ignored comment. Unhide

How about talking to your neighbors to see how they made out.
You can also keep an eye on how long comparable apartments are being listed and whether the numbers are going up or down.

I totally disagree with the statement: "'A small bump' is more than reasonable in this economic climate (for the landlord, of skyrocketing property taxes, utilities, and labor costs).'

I think the following has more impact on prices:
Brooklyn unemployment rate is probably around 11%. Many owners would default without rent income.

Ignored comment. Unhide

perhaps the tenant should move then.

Some landlord need to be educated on the current comps. Some landlords truly have no clue and will appreciate the info. Some are arrogant and "don't give a rat's ass". The uninformed tenants will stay with the arrogant landlords. In some cases, the difference is not worth the trouble for neither party and it's a matter of who blinks first.

Hey teacherdude, I wouldn't be taking advice on renting from NYCMatt. He has a pretty strong anti-renter viewpoint that taints his views on everything. I'm not saying it's a wrong viewpoint, but not the one advocating for you.

I have a few questions for you:

1) When was your current price negotiated? Is it a "new" price that was reset to market in 2009, or is it a price from 2008 or earlier? Many of us who had pre-2009 leases (at already-low rents) dropped them 20% last year during the 2009 negotiations.

2) How much is the bump in percent terms?

3) How much higher is it than comp on Craigslist? Are the comps on Craigslist such that they show up once and disappear in a week, or are they ones that keep getting posted every week? If it's the latter, then keep in your mind that those are prices no one is actually willing to rent at. If it's the former, then it's a true comp.

Now, to answer your questions:

>> 1. When should I begin my negotiations?

You should begin your negotiations at a time when you can actually act on other opportunities. If your lease is up at the end of July, if the market there is anything like the market I deal with, that means mid-June. My technique is to get all the apartments I think might be interesting picked out, see them all in a few days coincident with negotiations with the existing landlord. That way, you know your options, and you know when you can push harder because you know what your backups are. The LL is no dummy in sending you the lease renewal now, this is a tactic to take away this power from you. If I had a management company, I'd want them to do the exact same thing. Your best response is to ignore for now, possibly tell them that you as a group have not yet decided what you'll be doing next year since you're still 3.5 full months away. Basically, put off the issue for about 2 months politely.

2. How should I negotiate with them? Email? (They’re generally responsive). Phone? In person?

I think email is best for a few reasons. One is that there is a written record, so that if a difference of terms arises later, no "confusion" can be claimed. Another reason is that you can control the timing, especially if you are considering other places to rent simultaneously. Finally, many people have better opportunities to think things through, figure out all the angles, and respond optimally if they have more time than in person or over the phone. Again, this is not something that you need resolved quickly.

3. Should I make a counter-offer to their slight increase from last year? Should I tell them that I will leave unless they lower the rent? Other ideas? Based on a very preliminary search on Craigslist, the rent is comparable or a bit high relative to what’s currently being offered.

You should be armed with true alternatives rather than empty threats. Trust me, it's a completely different story saying to someone "I'll leave without a x% reduction" when you mean it vs. when you don't. The only way you'll be able to get this is to know what your alternatives are, and the only way to know that is to actually view these other apartments, negotiate on them, etc. Account for the cost and inconvenience of moving so that you know before-hand the price that you'll be willing to stay at. Sometimes you know that what you have is already a great deal, and that searching will be a waste of time. This does not seem to be the case for you.

4. If I would like a longer lease (2 or 3 years), how would this affect the dynamics?

I think longer leases, with exclusive right of tenant to terminate after the first year with X days notice, are the way to go on initial leases since it amortizes fees and moving costs. That being said, I would never sign a 2-3 year lease without this right to terminate as you are liable for the rent, so you have to find a subtenant that is approved should you leave, etc. On renewals, it depends on dynamics, I guess. If you just came out of a 1-year lease, asking for a 3-year lease might be strange. On the other hand, if you have a right to terminate, then it's a free option: you can leave if you choose.

Oh dear, re-reading NYCMatt's responses, I can now see that he's giving diametrically opposite advice from mine.

"Start your negotiations ASAP in person, if possible. Over the phone if you can't do it in person."

Can you explain how this is to our dear poster's advantage, NYCMatt, a full 3.5 months before his lease is up, well before he can get any leverage by finding alternatives?

Ignored comment. Unhide

"And moving is a BIG DEAL. If this is ultimately what's going to happen, it's better that you know it three months beforehand, rather than 10 days before you're expected to vacate."

Who said anything about 10 days? Your advice is basically to do some roundabout negotiation and sign now at the asking price more or less without actually having any viable alternatives. That option will be on the table 2 months from now as well. If teacherdude wants to adopt a self-defeating stance, then your advice is golden.

concur on inon advice - "You should be armed with true alternatives rather than empty threats. Trust me, it's a completely different story saying to someone "I'll leave without a x% reduction" when you mean it vs. when you don't...." etc....

Moving is obviously a hassle for the tenant.

But it is also a hassle for the landlord. Perhaps having to pay part or all of the broker's commission. Painting. The risk of the apartment being vacant for a month or longer. The risk of a bad tenant.

It is frequently in everyone's best interest to negotiate a win-win agreement. In the current environment I think you can make a good case for no increase. As inonada says, though, do your homework. Know your options. Show your landlord comps. And don't be in a rush to make a decision - a good negotiation is typically drawn out over a good period of time.

Good luck!

Teacherdude, I've negotiated several times with landlords for a one year lease with an option on my part only to renew for a second year at the same rent. Then you have the option to stay or leave after the first year after considering rent comps and the bother and expense of moving. It's generally worked well for me, but if rents drop significantly, you are stuck with the rent in your option.

I generally try to negotiate by phone and not e-mail. You have a more immediate back and forth with the landlord or the leasing agent and I have found that the landlords have not tried to renege on what was agreed to on the phone conversation. If you have doubts about your landlord, then getting their response by e-mail is wise. I usually contact the landlord as soon as I received the lease renewal as they sometimes have to check with attorneys about changes to their standard lease agreement and that might take a little time. If you're more comfortable, yoiu could wait until the end of May to contact them.

I would also check on nybits.com or urbansherpa.com to see if your building has other apartments for rent at a lower price than what they are seeking from you. I've seen this more than once.

Best of luck to you.

I've always been told that midsummer starts have the highest rents (June, July starts). Is that true?
What months of the year do you think offer the lowest rents to start/renew a lease?

When do you get the most inventory to choose from? Is it also the summer? Does it vary for studios / 1beds vs 2/3beds?

My understanding is that much of the seasonal demand come from graduating students (both undergrad and grad) starting work in the summer. However, I'm not sure how this translates into rental price and inventory availability, especially for larger apartments.

Any thoughts?

My LL e-mailed me and said he would not be raising the rent...then I e-mailed and requested a $600 reduction...we went back and forth and he agreed to a $375.00 reduction. Check SE to find out exactly what the rental market in your area is and go from there....a two year lease would be leverage on your part in getting a rent reduction.

The months with lowest rent starts are Dec 1, Jan 1, and Feb 1. Probably Jan 1 is the absolute lowest. I think inventory turnover is larger during the summer. A good blend of quality inventory & low rents comes in the fall. The people who have quality places but over-priced during the summer start getting real ansty once September comes and they still haven't rented the place: they know they missed the season and don't want to be without a tenant all winter.

In terms of the source of the seasonality, besides graduating students who get locked into the summer cycle long after they graduate, you also have school seasonality for people with kids in larger apartments. Most of them want to time their moves for the summer as well.

Julia, your use of $600 and $375 is a bit useless to our dear teacher friend as he/she knows not what the absolute level of your rent was. It would be helpful to him/her if you gave that info as well. If I recall correctly, the rent pre-reduction was somewhere in the neighborhood of $2500?

I live in a related rental building. when we negotiated the lease renewal last month, they agreed a 11% reduction for the rent. it's not realistic for the landlord to ask for same rent as last year, giving how many new condos are been converted to rental this year.

Wow, thanks for your incredibly thoughtful response, inonda, lobster, kevin and others, you’ve definitely given me some things to chew on.

To answer some of your questions, making comparables on CL is not so easy, without seeing the other place, etc. I will say that my apartment is on a rather noisy, seedy street in East Flatbush, Brooklyn. The block and building are really not great at all, so I’m definitely looking at the lower price ranges for the size. One thing that I am sure of is that the APT sat for a few months before I took it at the end of last year (with an accompanying price drop). Thus, I’d say that the rent that I’m currently paying is the new adjusted rent.

The other consideration is that moving is a rather large burden, and I would rather stay here because of the convenience of the location. Inonda, what I guess I hear you saying (which makes sense) is that without a true conviction to move (which I'm not sure I have) it’s harder to drive a bargain. Any suggestions in light of this?

The “bump” in rent is about 1-2%. There are some comparable apts on CL now that are 5-8% lower, but not more than that, so a 5% drop off the current price would be ideal. Again, not sure how asking for a longer lease option (2-3 years) would play into this. (Let’s assume that I’m sure I want to stay this long, but definitely not more.)

One more request: I’ve composed a draft email which I’m somewhat ready to send to the management to at least open up the conversation. Are there any experienced long-time users of this board (perhaps some who have so kindly contributed so far!) who would be willing to read it and tell me if it has the right tone? I’m not sure if there is a way to send private messages through the system, but if not I can certainly post my email address.

(I will gladly post it on this board for everyone else’s edification once the issue has been settled. Also, my next chance to check this board will be tomorrow morning, so don’t get antsy if I don’t say anything before then!)

Thanks again for everyone’s contributions!

After living in my apartment for two years, my rent went up from $1514 to $1884. What's the likelihood of me negotiating it down? I always pay the rent on time, no other problems...overall I'm a good tenant. Any advice? Thank you

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