Should you try to reduce your rent?
Lately it seems that rent prices have been dropping in many areas of the country. Here in San Mateo some residential apartments are dropping prices as much as 20%. This seemed a bit unbelievable until I looked on Craigslist and found that a specific apartment my husband and I looked at around two years ago actually dropped its price by $300 a month from $1699 to $1399 a month. With our lease expiring soon, I wonder if we should move or try to negotiate a lower rent.
My husband and I both do not like moving because it takes a lot of time to look for a new place. There is also the cost of renting transportation and the general headache of carrying everything. However, if the discounts are large enough it might be worth the cost. Although occupancy rates are still quite high in San Mateo county I am seeing many similar nearby units for rent on Craigslist for anywhere from $150 to $300 less than our condo. It definitely seems that we are paying too much for what we are getting. If we are able to sign a new lease for $300 less a month for a comparable rental then it might be worth the hassle of moving.
Another option is to just ask our landlord for a discount. A few months ago a Wall Street Journal blog post showed how a simple letter detailing the declining of the rental market in Manhattan allowed the author to reduce her rent by $300 a month. I think this would probably work well for any good renter in a declining rental market since it would hurt the landlord quite a bit to leave an unit empty for a couple months. For example, if my landlord gave us a discount of $100 a month then he would be losing $1200 in a year, but he would lose $1700 a month if we moved out.
I think the important thing is to craft a letter that incorporates evidence that the rental market is declining. It also helps your case if you are consistent on your rent payments. This probably would not work in areas where rental markets are still quite active, but I think it is still possible to negotiate a lower rental rate for a longer term lease. In general month to month leases are the most expensive, and leases that are a year or longer could provide a discount.
Anyway, right now my husband and I decided to just write a letter to our landlord requesting a discount. I will probably enclose some of the cheaper listings I have found recently. I do not expect that I would get a $300 a month discount, but I would definitely be happy with a discount of $50 to $150 a month. That discount would add up handsomely over a yearly lease. The largest expense in most of our lives is housing, so I think it makes sense to try to reduce that cost if possible.
Have any of you tried to ask for a rent reduction this year ? Have you moved recently due to large rent drops in your area? Feel free to share!
Update: I got $75 off per month on my rent after simply asking my landlord. We signed a new 1 year lease, and this would save us $900 over the year.