Lease renewals: where are you coming in at?

I'm about to go through my lease renewal process. In the prior year I got a 14% reduction. Not sure what to expect for the coming year but would be delighted if I could hold at the current level. Would be pleased to get additional insights from other folks who are now renewing.

Not a renewal, but-
I signed a lease just this February, for below asking, for 2 years instead of 1.

Remember when landlords used to demand a premium for a 2 year lease, effectively building in the renewal increase they were gonna hit you with 2nd year?

Not so much these days..

I'm a landlord in Harlem - I'm offering no rent increases to all of my market rate tenants. So far, everyone who wants to stay has accepted the lease amount. If they wanted $100 bucks or so off I'd give it to them, but I'd remember them next summer when I suspect rents will go back up. If they want to squeeze me in bad times then I'll squeeze them in the good times.

Jazzman, are these new tenants as of 2009? Did you have to drop for existing tenants into 2009, and by how much?

FWIW, I'm completely with the squeezing little amounts bit. In 2009 though, if tenants squeezed, do you hold it against them?

LL here, our rents are going up in the 2-4% range from last year. I might settle for no increase if the tenant asks are they are a good tenant.

I know I can re-rent apartments easily again, which was not the case last year

inonada - I've never lowered someone's rent without them asking -if they started in 2008 and are there now many asked for reductions and I gave them in 2009 - now I'm keeping rates flat at 2009 levels. But some of my tenants are still paying 2008 rates. From 2008 to 2009 the most I dropped anyone's rent was giving one month free.
I do not consider tenants who asked for a rate reduction in 2009 as a squeeze. The market tanked, I expected my rates to go down. I think a squeeze is a tenant who says to himself in 2010 - "rental rates might be down 5% or flat - so if I move out my landlord may get my current $2,500 rent or a bit less, but the apartment will sit vacant, he'll have to paint and clean it and he may need to offer a free month or pay a broker fee. All in if I move out it's going to cost my landlord maybe $3,000 so I'll ask him for a $200/month reduction in rent and he'll take it."
Sure it probably makes sense for me to lower the guy's rent by $100 (but probably not $200) -so I'll work with him - but in good years you can bet I'm raising his rents to the max. In years where I can rent a unit in one day, not even think about paying a broker fee or offering a free month etc - I'm going to jack the guys rent up and maybe even beyond market rate and I'd say to the tenant -hey you've got to pay for movers, you may need to take off work, you're going to spend hours finding a new place, you may have to pay for a broker so all in that may cost you $3K to move - so market rate for this unit is $$2,800 but I'm going to charge you $3,000 - or you can move you decide.
As you can see, it's certainly a karma thing for me.

my neighbor just signed a renewal, rent reduced $200.00 which isn't much since i renewed in February and got $375.00 reduced.

I just signed for a second year on my lease. Up 2%. I opened the discussion by asking for no increase plus one month free in a 12 month lease (because last year my landlord had to pay a one month fee to the broker), but he balked. Although he had been having major trouble renting out vacancies in my building (12 unit townhouse walkup on the UUWS), he thinks that the market is markedly improved in the past 2 months.

Just signed a 2 year lease in prime UWS, 3br/2ba, under $3/sqft. No increase in year 2. I'm not complaining.

Complicated question. Factoring in 2 free months last year when I swooped in at what appears to be the bottom of the market in retrospect, rent was effectively $2657. At renewal in May we requested a free month and received 1/2 month free, but rent was raised 4%. Effective current rent is $3095, and we are really feeling the difference esp. as I am now self-employed.

Needless to say, we will not be renewing again, but moving will be very tricky as we are expecting our first child in January. Finding an affordable 2-bedroom is crucial, so we are debating whether we move to an iffy area (Harlem, Crown Heights, etc.) and save hard for a year or just throw in the towel entirely and move to a cheaper city.

So the short answer is: effective rent up 16.5%.

ev, did I know this about the kid? that's fantastic, congratulations! Since I moved to the UUWS I have really been digging West Harlem, although I know today's headlines bring you a dead nun I think it's worth exploring the area.

and to answer nada's question, I'm a landlady in midtown, and I think the rental market's improved, but I love my tenant and I'll keep her rent flat as a result.

ali r.
DG Neary Realty

evnyc... Congrats!!!! I guess no marathon this year. Opening new business in this economy is difficult but I'm sure it will work out for you.

Hi Ali!
Nope, just going public now! Thank you! It was fairly unexpected, and makes getting the business started a little more complicated. We may well take a look at West Harlem - a dead nun is nothing compared to 52 people shot in Chicago, where the extended family and friends keep trying to get us to move:
http://www.huffingtonpost.com/2010/06/21/chicago-violence-at-least_n_619259.html

i am in a nice 1 br high floor with views in chelsea.
renewed my lease last Aug (09) for a net effective rent
23% less than the year before. the new lease has come in
without the free month and an overall increase in the
net effective rent rate of 19% (but still 8% less than
2 years ago). i will probably put up a fight since the
inventory in the area is going through the roof (2 new
high rises opening up).

Thanks, dreamer! So far, business is reasonably steady, although I haven't had the energy to really get out there and market my services much. :)

Thanks for the detailed response, Jazzman. I'm usually an "inflationy increase is fine regardless of whether the market was up 5% or down 2%" type of guy, specifically for the reasons you state. Smoothing the bumps helps the relationship and keeps the same people in the same apartments longer, which is to the benefit of all. Last year's drop was too large to ignore, for better or worse. Truth of the matter is that I would have left my place without a reduction, and I was very honest and upfront about this. All-in-all, I probably would have been just as content had the market not tanked. Not a pleasant conversation to have with a LL you're friendly with, and the reduction doesn't make that much difference in the scheme of things for me, but there was no way I could have lived with myself knowing the market tanked and I was paying the same.

Evnyc -- congrats!

hey evnyc that's great news. congratulations!

i'm dreading my lease renewal which is due any day now. we got a decent deal last summer so i'm expecting it to go up. maybe i'll be pleasantly surprised. doubtful. i'll post when all is said and done.

ev - that's great news. congrats! hope you don't mind me askin' - is a 2 br necessary b/c of the child or b/c of others (family, help, etc) that need a place to sleep? if the former, maybe you could get away with a large 1 br, say by splitting or converting a dining alcove or by splitting a large bedroom into two. just a thought. little ones don't need much room at all. also, i know a mom living around convent and 140ish in harlem. she loves it; says there are lots of families, etc. might be worth a look.

congrats enyc.... you've found your true calling....

uwsmom... thats' a bad attitude.... "accept" that you will be moving.. play it in your head... 2 days headache at top....

then negotiate.... when I do a business negotiation I'll play all my worst case scenarios... when I'll walk, what's an easy give.. what are my alternatives.... I have a plan and will walk if need be. ALWAYS ALWAYS negotiate from a position of power. Line up 4 or 5 other rentals... then start the negotiations... you'll always be in the driver's seat...

i know, i know. i'll negotiate but i SO don't want to move. i'm a sitting duck this time around.

uwsmom -140th and Convent is the most up and coming area of Harlem (note it's not the best but it's improving the fastest). Or maybe I just feel that way because I own buildings there:):)

Just renewed after an unsuccessful effort to buy before lease was up. Moved in last July with one month free with rent that was 20% lower than previous tenant. Free month is gone in my building and recent rents seem to be trending back up. My lease renewal came in 2.5% higher, with same amount for 1 or 2 year lease (I was surprised). I didn't bother trying to negotiate having seen similar apartments recently rent for hundreds more. Honestly, I thought the increase would be at least 5% maybe even 10% or more. Figured I'd save the fight for another time...

LLs must be getting their profits squeezed because their property taxes and other costs are rising by 3-5%

uwsmom - had the same feeling as you have prior to my renewal that came last week. We got a sweet deal (20% off asking/prior rent) on a WV place last year and was prepared for a fight. i tried to convince my wife to take adopt the "w67thstreet" negotiating mindset, and be genuinely prepared to move, but i received a very stony response. anyway, they asked for a 2% increase so we're staying. To 67th's point, it does help to get excited about another place or nabe - i had my wife going on East Village for a while - i'll revisit that next time.

We had a flat renewal in June - plus the landlord offered to install new AC units.

I think if you budgeted based on a "net effective", you are feeling screwed, instead of if you looked at free months as 1 time and your actual monthly payment as your true rent.

Based on 2009 rents in a couple instances in good buildings, I saw renewal offers flat if they were early in the year (Jan-March) and up a few or so percent if April, May, June.

I have anecdotally seen more renovations/refreshes of apartments too, including floors.

Aren't "free" months nearly always never-to-be-repeated? I'd always amortize them over 2-3 years with the expectations that renewals would always exclude them. I.e., if I could get one place for X with one month, or 8.3% "free", vs. the equivalent for 5% less with no "free" month for 2 years, I'd go with the latter. I'd know I'd stay there for 2+ years, and I'd expect the "free" months would not be offered to me again...

I've lowered my rent by 17% last year and then another 7% with this year's renewal at 34st and 1st, although in a walkup

We're in a Related building on UES and moved in last July and had negotiated a lower rent than the listed price and one free month and free health club. As we will most likely buy or move out of the city in the next year, we tried to negotiate the renewal with one month free and the option to leave the lease early. We were ultimately given the option of a 21-day concession or the ability to leave the lease after six months. Since we wanted flexibility in moving dates, we opted for the later. But hey, we still got the free gym for another year. The rent increase this year was around 2.5%.

Great intel. By the way, the extra health club charge is such BS, but it is so easy to make it part of the rental package, just put it in your original offer. The rental agents know they can give this easily. But better to negotiate for the time you live in the building (i.e. covering all renewals) rather than the term of the lease.
I see the ads for Related here on streeteasy and they are advertising giving it free now. But of course, get the free month before you get the free gym!

LL started by asking for a small increase in the montly rate. We negotiated and wound up with an even smaller decrease. The existing rent is 15-20% lower than it was in 2008. We got a free month when we moved in last year so the net effective rent actually went up.

"We got a free month when we moved in last year so the net effective rent actually went up"

Yup. I think people should view these benefits as one time things, and not budget their housing based on net effective.

Rent up 2% for a 1 year lease at Glenwood, after managed slight decrease last year. Usually very few vacancies in my building so this was fine.

3 apartments that I am privy to, all were paying under rates in their buildings, increased from 0% to 3%.

Negotiated a decrease last year ~15%, the ask for renewal is flat.

Just got our renewal offer with a raise from $3795 to $3925 for one or two years.

According to the RoseNYC website, there are no vacancies in our building - The Ellington at 52nd and 8th.

If that's their initial offer, it's pretty muted for a renewal from a large rental manager at just 3.4%. Those guys are experts at raising as much as possible without you saying "Screw it, I'm moving!

Cliff702, I'm in a Rose building too and got a 2.5% increase...clear to me that they don't want tenants to move cause there's little confidence they'll bring someone in higher. Or, they may actually be factoring in turnover costs...which would be shocking.

LL UWS up 6-8%, of course 09 was pretty bad, so take that into context.. i could have probably gotten more, but the big difference is that i get number of hits quicker, meaning i usually post high price first, expect minimal hits, price down to actual rent, then rent out.. this time around i only priced once (high first) and got tenant.. kind of kicking myself in that i maybe should've priced higher, but can't get too greedy.

As a landlord, I'm not pushing for that extra $25-$50. The economy is in a functional depression and
could easily fall off a cliff, so I'm hedging and securing my basic survival income by re-upping
good tenants at flat or 3-5% increases.