Wanted - Advice on negotiating a rent reduction when my lease comes up for renewal

According to the broker I spoke with yesterday, she expects the rent to stabilize or increase just slightly between now and probably summer since most people do the move around this time. So if you are looking to sign a new lease, Sept or later is better for you.

approach is contingent on whether you are bluffing or really prepared to move.

I would present it as a win-win situation: landlord gets to keep a good tenant who pays on time every month, and doesn't have to spruce up and market an apartment that may stand empty for a while in a down market.

Thanks, all.

FYI, columbiacounty - I really don't want to leave. Any thoughts?

very nice approach...comisserate about bad times....would really appreciate any kind of break you could give me, etc. you know your audience---careful not to push too hard because then you run the risk of awakening his fear/flight reaction. its like any other negotiation in my mind---if you're not prepared to do X....don't bring it up.

Depends also on if you're working with a management agency or directly with the landlord, and if it is a managed rental building or an individual's investment property. If it is a rental building or long-time rental unit, they are potentially less inclined to negotiate unless it is a corporate policy. An individual landlord has more to lose from the property sitting empty, plus the wear/tear of the move in/out. You may have much more leverage in this situation. We were able to minimize an increase during good times by identifying the decision maker and sending her a $50 gift certificate to Bliss at X-mas (2 months before our lease was up!). Our increase was the lowest of anyone else we talked to in the building that year.

Forget the psychology. Get data. Come with data. Be transparent about where you think the market is, and what you think the apt is worth. This works best in large buildings with many comparable units, and less well with small, individual (and often irrational) landlords.

data and irrational people don't mix. the answer to data is (just check all of the threads here): but.....this situation is different.

Thanks. I'm in a four-unit townhouse and so will deal directly with the (investor) landlord - who is a pretty decent, reasonable guy.

In the current market, you hold a lot more cards than the landlord (esp. if an individual - I agree with OTNYC on that). As much as you don't want to move, the landlord wants it even less - apt empty for at least a short time, probably a price cut and a month free to get someone else in, general hassle of turning over tenants, risk that new tenant is psycho, pain in the butt and/or unreliable payer of rent, etc.

Derek's suggestion of bringing data is important - especially since recent data will almost inevitably support your case - but you also need to bring a willingness to ask for and push for what you want. I think cc's approach is too soft for this market. Polite but forceful will be much more effective in this market than the soft sell.

Also, hofo is probably right on timing (Sept market softer than now), but the broker spiel about rents bumping up in the next two months is total BS. Reality has to be down near term, down further after that. As an example of near term, a friend just signed a new lease and got 45 days to move in (during which apt sits empty) and a few thousand $ of renovations/new appliances, all at 25% discount from what the last tenant paid. This is the first year that the influx of new bankers, lawyers, etc. who arrive during the summer will be down materially, as firms really didn't cut hiring in fall 2007 (to start in 2008) but slashed it massively last fall (to start this summer). This is a big part of the summer turnover in rentals and the hole vs. 2007 is in at least the low thousands of people just from Wall Street associates/analysts and Biglaw associates.

Topper - you might also want to see lad's post here
http://www.streeteasy.com/nyc/talk/discussion/10423-why-your-manegement-company-might-refuse-to-negotiate-a-lower-rent-on-lease-renewal-

Many thanks, sidelinesitter.

Pretty interesting insights.

but...if you really aren't prepared to move, i still say you have to be careful. its not like negotiating for a place where you don't live.

and many of those that were hired by the firms are being asked to defer their start dates until later, many November or March, some up to a year.

At the bottom of the last Wall Street downturn (summer 2003), my then colleague psyched himself up to go in strong with his landlord and demand a 20% reduction. There was some support from comps, although not an open and shut case, but he figuring that if he asked for a big decrease it would set the tone of the discussion and he would end up with more than just a courtesy reduction. Anyway, he marched in and started to make his speech and the landlord agreed to the 20% before he even finished talking. My colleague doesn't know to this day how much he left on the table. Granted it's one example, one time, one place, but there are some similarities between that time and place and the current one.

Anyway, what's the downside if the landlord calls your bluff and you blink?

Also, the definition of "don't", as in "don't want to move", tends to vary. For a couple of hundred a month, most people won't. If the comps (back to the data, data, data advice) say, which they may, that you can save 25% then you might revisit the meaning of don't.

ask for the moon...what price you want and then start negotiating from there...remember you hold all the cards this time around.

agree with julia.

or, alternatively, ask for what price you want and then don't negotiate from there. it's just business, nothing personal. you can still be respectful in deliverig the message, but if you don't ask you won't get.