According to the US Census, rent prices have increased every year since 1940. Back in the 1950s, the average rent was around $42 per month, which would be about $284 today (adjusted for inflation). By 1990, the average rent was $447 per month, or $571 today. In 2022, the average rent was $1,295. As a result, nearly one third of all households today spend more than 30 percent of their income on housing costs. If high rent has you struggling, you might wonder if it’s possible to negotiate with your landlord. Yes, it’s possible, and here’s how to do it.
Research Area Rent Trends
Research the rent trends in your area, especially if you live in a major city. With more people working from home post pandemic, many renters are moving farther from the city center into suburban and rural locations. As a result, rents in some major cities have fallen. For example, according to a recent analysis done by CoStar, the average rent in San Francisco has dropped 24 percent since March. Other cities, like Boston, Seattle, and Chicago, are down roughly 10 percent. If you live in a large city, compare what you are paying to the current rents in your area. You might be able to negotiate your rent down to better reflect the current rental market.
How to Contact Your Landlord
Reach out to your landlord in the way that makes you the most comfortable. For example, email is fine if you prefer to get your thoughts organized and written out. If you aren’t sure what to say in your letter to your landlord, this letter builder will walk you through it, step by step.
A face-to-face talk via FaceTime or other method, especially if you know your landlord well, might alleviate any misunderstandings that could arise from an email. Keep all letters, emails, and text communications with your landlord for your records.
Start Negotiating with Your Landlord
Go over your budget and determine how much rent you can reasonably afford to pay. Make sure this amount is aligned with the rent comps in your area. Knowing this information is crucial when negotiating with your landlord. If you go in without a number in mind, you could end up agreeing to something you can’t afford or requesting a rent amount that’s out of range for your area’s rental rates.
Consider making concessions
Calmly present your best-case scenario to your landlord and work from that point. Be open to their ideas and be willing to offer some concessions. If you are unable to negotiate a lower rent, ask your landlord if they might consider allowing you to move to a less expensive unit. Your landlord might consider other concessions, as well. For example, if your landlord typically offers a free month or waived fees for new renters, ask if they would be willing to offer you the same concessions to keep you as a renter.
Emphasize your strengths
If you have consistently paid your rent on time, emphasize that as you talk with your landlord. Landlords want to keep good renters since finding new renters is expensive and time-consuming. If you are maintaining the rental, keeping it in good condition, and you get along with all your neighbors, these are also great points to mention when talking with your landlord.
Landlords tend to prefer long-term renters, so if you are planning to stay put, that could work in your favor as well. Offer to sign an extended lease, such as a two-year lease, in exchange for a reduced rent amount. Summer is a busy time for moving, so consider offering to end your lease in the summertime, when rates are higher and there’s more competition for rentals.
Compromise with your landlord
If you live in a building with several empty units, ask your landlord if they would be willing to lower your rent in exchange for referrals. If you rent from an independent landlord who has monthly expenses you could help with, such as yard work or basic maintenance, perhaps they would be willing to allow you to take care of this in exchange for a lower rent rate.
While moving out might not be the ideal solution, finding a less expensive rental could be an option. If you are in a position where you can move, let your landlord know that you are considering this option. Your landlord might be willing to waive the penalties for breaking your lease, or they may suggest an agreement that’s commonly referred to as cash for keys.
What is cash for keys?
If you and your landlord are unable to reach a compromise and paying your current rent amount for the duration of your lease isn’t possible, your landlord may suggest a solution known as cash for keys. Landlords have a variety of reasons why they might suggest this, but usually it’s to avoid having to evict someone.
Evictions are expensive and time-consuming. A landlord can spend an average of $3,500 to evict someone, according to TransUnion, but some evictions can cost up to three times that amount. The costs include lost rent, court fees, and filing expenses. To avoid this months-long, complicated process, some landlords will suggest a cash for keys agreement.
Cash for keys agreements are legal, but several states have laws pertaining to the circumstances in which such a solution can be presented and how much money can be offered. Some states even regulate who can make this offer. For example, California has a statute (Cal. Bus. & Prof. Code section 10131) that states only a licensed real estate broker or a salesperson under the supervision of a real estate broker is authorized to offer a cash for keys deal. Research the laws in your state to see what regulations are in place.
If your landlord proposes this type of deal, make sure you get it in writing. Both of you should sign the agreement. The written agreement should include the amount of money being offered and a move-out date. It’s a good idea to have an attorney look over the agreement to make sure it complies with the laws in your state.
It’s important to note that a cash for keys arrangement is separate from your security deposit. Your landlord may still conduct a move-out inspection and deduct any damages, unpaid rent, or unpaid utilities from the security deposit. If you have questions about a cash for keys agreement or about evictions, contact a housing counselor.
The US Census Bureau recently found that about 14.5 million renters have no confidence or only slight confidence in their ability to pay rent in upcoming months. If you are struggling to keep up with your rent, negotiating with your landlord may help you find a solution that works for both of you.
