A WORD FROM THE AUTHOR: I hope everyone’s having a good start to their week. I’m going to jump right into this week’s personal finance story with advice and all the supporting research. This one’s for all my apartment renters out there.
As always, I am not a financial advisor. Enjoy!
What Happened With My Rent
Rent laws vary from state to state. Nobody wants to spend a Sunday brushing up on their state’s rental laws or lease agreement but reading between the fine print can help your finances out. Luckily, California has some of the strongest protections for tenants within the country.
Last year, my yearly lease expired and transitioned to a month-to-month contract as the pandemic raged on. I’ve never felt more liberated than living on a month-to-month lease since I’ve been tied to yearly leases for as long as I can remember.
I paid my ongoing rent dues ($1,900 for a one-bedroom in Los Angeles) and called it a day. I figured this amount was something set in stone and untouchable. I couldn’t have been more wrong.
A Friend Calls In
My friend, Jesse, texted me last week with a note that read, “Hey man, I liked your apartment complex. I called your complex and a one-bedroom is running for $1,600 currently!” I couldn’t believe that rent at my complex was 16% lower for new tenants. I was completely furious. The next thing on my agenda would be to immediately go to talk to my landlord to see if we can reach an agreement.
Pro tip: Have a friend call your complex and ask the current price of apartments
I thanked Jesse for letting me know this information and thought how grateful I am to have someone let me know this information. I could be saving $3,600 a year from a lower rent price. Nothing makes me more furious than a missed opportunity. Keeping my cool, I did my research on what could be done in this situation.
Researching Rent Adjustments
For existing tenants, there isn’t a lot that can be done. However, I have heard that it’s not impossible to lower your rent for your current apartment. Here’s some tips I picked up on while doing my research:
Mention that you’re a good tenant (and your credit score if applicable)
Don’t lash out at your landlord. It’s typically the leasing company who makes the decision
Bring up your current contract if you’re on a month-to-month basis. You could negotiate signing a yearly lease at a lower rate
If you’re willing, offer your services (maintenance, marketing, etc.) to the landlord to help around the complex
At the end of the day, your landlord is a business owner and thinks like a businessman. You’ll need to work your way into the agenda.
Note: This applies to existing tenants and newer tenants have much more flexibility in negotiating rent.
The Negotiation
The next day, I walked over to the leasing office but found it closed due to social distancing restrictions. Make sure to have these kinds of talks in person rather than over email or phone.
Pro Tip: Be sure to dress nice whenever speaking to your landlord in person.
I called the landlord and read the following script:
“Hi there, do you have a minute? I’d love to ask a few questions about my apartment. It’s come to my attention that rent is significantly cheaper due to Covid. Is there any way you can adjust the rent for existing tenants?”
My landlord notified me that his hands were tied and there was nothing he could do. I pushed back with several different negotiation tactics, finishing with the possibility of moving out. He stood his ground and assured me that my rent could not be adjusted. I didn’t yell at him, but I comforted him that I knew it was the managing property who makes this decision.
The Rules of Renting and My Next Steps
There’s always a question in personal finance on whether to rent or buy in your local area. The answer is that it depends on where you live. Renting has pros like maintenance, access to amenities, and could be cheaper than buying in the long haul. Check out this guide from NerdWallet for a calculator on what’s best for you. Typically, renting is beneficial if you live in larger cities.
With nothing that can be done, I’m looking for a new apartment complex. Rent can be one of the largest expenses that you’ll face throughout your personal finance journey and the marketplace is entirely different from where we were in 2019.
From a Harris Poll last September, nearly 40% of urbanites were considering leaving their area
With the possibility of working from home, the time has never been better to locate to an area that fits your budget.
Have a great rest of your week!
-Jordan