Rents in giant cities are falling because of Covid. How one can Negotiate Your Month-to-month Cost
Apartments for rent in San Francisco.
For those looking to stay in big cities, the coronavirus pandemic has an advantage: rents have fallen in some areas.
That said, it’s a great time to negotiate a lower monthly payment or hit a deal on a new apartment.
In October, the national rent index fell 0.4%, according to the monthly report from property data site Apartment List. While this is generally in line with fall rents trends, it usually comes with the fastest growing months after house prices drop from March to June, the report said. Rents in Germany fell across the board by 1.4% compared to the previous year.
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There is also a big difference depending on the location: according to the report, rents fall fastest in large cities on the east and west coasts.
“What was a big surprise all year round is the steep fall in rents during the summer months, especially in some of the country’s most expensive markets,” said Igor Popov, chief economist at Apartment List, adding that rents are not falling in these areas were recorded for some time.
The fastest changing cities are those with big tech companies that have given employees the ability to work remotely permanently, encouraging many to leave big cities and sky-high rents behind. When these workers left cities like San Francisco and New York enough vacancies were created to bring rents down.
Additionally, the economic impact of the pandemic could also weigh on house prices, according to the report. Workers on leave or laid off may have to move out of expensive housing, creating vacancies.
“The pandemic really started a recession,” said Popov. “The massive loss of jobs and income resulted in many people choosing not to start new rental households, or to move out alone, or not have the money to pay the rent they were looking for at the beginning of 2020 had hoped. “
With future uncertainty about both the pandemic and economic recovery, Popov says it is unlikely that major city rents will rise again anytime soon. That said, if you are considering moving to a bigger city, now is a great time. Here are some tips to get you started.
1. Do your homework
Make sure you understand the neighborhood you are planning to move into and what is in the market.
“We saw that the majority of the smaller homes had a lot more vacancies, so these smaller homes are amazingly negotiable overall,” said Eric Brown, a licensed real estate agent with Compass. “Larger institutional rental buildings are hardest hit by the pandemic.”
Also, before you bid, you should understand the specifics of the units, said Becki Danchik, a licensed associate real estate agent at Warburg Realty. Online listings can show net rent with one month for free instead of gross rent, which is the amount on the rental agreement, she said.
Knowing these details can help you determine what to include in a negotiation, she said. It can also help you see a lot.
2. Just ask
The most important part of the negotiation is starting the conversation. According to real estate experts, tenants shouldn’t be afraid to take the first step and ask about lower rents.
“Really, don’t be afraid to ask,” said Eric Brown, a licensed real estate agent with Compass. “You’re missing out on 100% of the shots you don’t take.”
Popov says it is more difficult for landlords and property managers to evaluate their units when the world is uncertain. This is a good time for apartment hunters to make an offer.
Additionally, landlords are likely to be concerned about long vacancies which can be devastating, which means renters currently have some leverage in the market.
3. Be nice
If you’re interested in a specific property, don’t just email the agent, landlord, or property manager with a low-ball offer, Brown said.
“Grab it, take a look at the property, be polite,” he said, adding that you don’t want to start off on the wrong foot.
If there’s something you’re generally interested in, send a message that includes the price you’d like to pay, your move-in date, how long you’d like to live there, and if you have any pets or want updates on the unit.
That gives the landlord a complete picture of your listing and creates a paper trail for both parties, Brown said.
4. If a lower rent isn’t on the table, ask about other amenities
If a landlord or property manager is unwilling to part with the monthly rent, or has already listed an apartment at a significant discount, there may be other things you can negotiate.
“If you’re going to spend money, try to forego it,” said Brian Carberry, executive editor at Apartment Guide, an apartment rental location in the United States
Really don’t be afraid to ask. You are missing out on 100% of the shots that you don’t take.
licensed real estate seller at Compass
This can include sign up fees, premium parking, gym membership – especially if there’s one in the building – or even help with covering a brokerage fee if you have one.
“If someone makes me a reasonable offer, I’ll be happy to contribute to the brokerage fee to get a new tenant,” said Brown.
5. Don’t wait for your lease to expire
According to real estate experts, people who do not want to move can also benefit from the current rental market and negotiate for lower rents. An especially good time to negotiate with your landlord is when you are nearing the end of your lease, according to Danichik.
Renters should do their homework on what happens to home prices in their neighborhood or building and then go to their landlord, she said.
“Any savvy tenant who follows the market knows that there are deals out there right now,” she said. If there are many open positions in your area, it’s a good time to apply for a discount.
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