The median U.S. monthly rental cost stands at $1,937 in March, according to Rent’s monthly U.S. Rent Report. That’s the lowest monthly median rental cost since February, 2022.
Meanwhile, U.S. rental delinquencies continue to climb, rising 6% from February, 2023 to March, 2023, according to Alignable’s March Small Business Rent Report.
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That seems to put rental consumers in a box. Prices appear to be coming down just as renters appear to be running out of financial steam after a long run of rising housing and apartment prices coming out of the pandemic.
Renters, however, likely have more leverage with pricing conversations with landlords than they may think.
“Rent price growth has been slowing in the US rental sector since September 2022,” said Jon Leckie, a data specialist at Rent. “Our latest price data showed a 1.7% increase in rent prices year over year. That’s the lowest growth rate in 20 months and the six consecutive months of single-digit increases.”
For context, rents sustained double-digit growth for 11 months between October 2021 and September 2022. “Consequently, it’s significant that price growth has dipped below 2%,” Leckie said. “Monthly price changes have been negative five out of the last six months, so price moderation is well underway.”
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Going on Offense
For renters looking to save some money, this means they have more negotiating power now than they did six months ago.
“Increases in inventory and a drop in demand mean vacancy rates are finally rising and landlords are having to compete for more for tenants,” Leckie notes.
To get rolling, Leckie advises renters to do their homework.
“Get a good sense of what’s on the market,” he advised. “Look at apartments in your area with similar square footage, similar amenities, and similar styles and use those prices as a base. Also, look up historical year-over-year changes going back before the pandemic.”
Even if you’ll likely wind up paying more for an apartment, “communicate an understanding of that reality but try to get any increase more in line with those historical numbers than settling for the historically high increases we’ve seen over the last two years,” Leckie added.
It’s worth working with your existing landlord on rental timelines, too.
“Approximately 80% of landlords are highly choosy when it comes to renters,” said Alex Capozzolo, co-founder of Brotherly Love Real Estate. “If a landlord has an established relationship with current tenants, ideally they would want to renew their lease.”
In many cases with renewed leases, tenants can negotiate a lower rent for a longer lease term. “For instance, they may take three years with a 15% increase to the rental in the last year only,” Capozzolo told TheStreet. “These situations differ based on the landlord/tenant relationship.”
For new rental applicants, try researching the local property market and find out what other landlords are charging for similar properties in the same area. “If few are cheaper, renters could use this as leverage,” Capozzolo noted.
Also, if demand is low, the landlord might have a hard time finding a tenant. “Pointing this out could give prospective renters a starting ground for negotiations,” added.
One mistake many new renters make is to overlook the market rent and agree to the asking rent.
“However, renters should only pay based on the market rent and not what the landlord wants,” Capozzolo noted. “The easiest way to rectify this is to conduct due diligence beforehand and keep relevant statistics ready.”
More Action Steps
Landlords may be hesitant to negotiate rent right off the bat, especially if they have no first-hand background knowledge of who you are as a renter.
That’s why it’s vital to be prepared to provide reliable rental history and even letters of recommendation from your previous landlords.
“This will give you the best chance to negotiate without any history with your future landlords,” said RentRedi chief executive officer Ryan Barone.
Barone offers a “to-do” checklist for renters looking to land a good deal on a house or apartment.
Get in early. If a renter wants to discuss rent, it’s important to do so before the lease start date. “This way, the landlord can appropriately budget for the property expenses if they decide on different rent terms with you,” Barone said.
Flex your good payment history. Renters can also help their own cause by “demonstrating an established history of being a responsible tenant, especially with the current landlord,” Barone said.
Be flexible. If your landlord is unable to lower your rent, there are other things you might be able to ask about.
“For example, if you’re a longstanding tenant who is trusted by your landlord, that landlord might be willing to offer you a parking space at no cost or forgo your pet’s monthly rent,” Barone said.
Make an offer they can’t refuse. Depending on your landlord’s circumstances, some owners may be able to accommodate a unique arrangement with you.
“This setup could mean discounted rent in exchange for maintenance duties like include sweeping the walkways, cleaning the pool, or mowing the lawn,” Barone noted. “This could be especially helpful to landlords with multiple properties if a renter is willing to help with these chores at all of their units.”
“You really won’t know until you ask, so strike a positive relationship with your landlord to see what’s possible,” he added.
