If you have spent time looking for an apartment to rent in New York City, you are already aware of how expensive apartments can be.
But did you know that most rent prices are negotiable? Listings you see on sites like Zillow or Apartments.com are just that – listings. That means the price you see is the price the landlord or broker is trying to get.
But in NYC, apartments very rarely rent for the listing price. This is due to a weird pricing trick used by landlords that we cover in our post on the topic here.
So if the rent is negotiable, where do you even start? How do you know what to counter with and which options are even on the table?
In this blog post, we will go over some key points to help you negotiate your rent and get the best deal you possibly can. With a bit of preparation and armed with the tips from this post, you can negotiate with your landlord and save a meaningful amount of money on rent.
Step 1: Research the Market Rent
The first step in negotiating your rent, and the most important, is to understand the market rent for similar apartments in your area. You can use listings sites like Zillow but as we mentioned earlier, these sites do not give you an accurate estimate of what renters are actually paying since they don’t account for any negotiation.
Instead, try using a site like RentPeek which provides data on what renters are actually paying in rent – not what landlords are claiming the rent is. RentPeek is free to use, and the data is submitted by other renters like you!
Now that you know what the real market rate for your apartment is, you are ready to start planning your negotiation strategy. The bigger the difference in the advertised rate vs. the market rate, the more opportunity you have to negotiate.
Step 2: Understand the incentives of the person you are negotiating with
When trying to rent an apartment in NYC, you most likely go through a broker, but there are times when you may be speaking directly with the landlord. It is important to understand that brokers will have different incentives than landlords do and learning the difference can help you negotiate successfully.
When a broker rents an apartment, they are paid a fee equal to either 1 month’s rent or 10-15% of the annual rent. For example, if the apartment is listed for $2,500, then the broker will earn either $2,500 (1 month’s rent) or between $3,000 and $4,500 (10-15%).
As a result of this commission structure, the broker has a very strong incentive to rent out the apartment as quickly as they can so they can collect their fee and move on to renting the next one. This is important is because often a broker may be willing to lower the rent if that means they can rent out the apartment quicker.24
To see why, consider the scenario where the broker earns a fee of 10%. If they rent the $2,500 apartment to you in one day, they collect their $3,000 and start focusing on the next apartment. If the $2,500 apartment takes slightly longer to rent, that is time taken away from them where they could be renting other apartments.
Let's say you tried to negotiate a rent of $2,400 instead. As you can see from the graphic below, the difference to your broker is only $120 but it is $1,200 to you! Often, it isn't worth it to the broker to waste time over $120, but it is definitely worth it for you to save $1,200.
On the other hand, the landlord has similar incentives to you since they are collecting the rent for 12 months, vs. a one-time fee like the broker. However, they have costs associated with their rental – most typically a mortgage and taxes. As a result, they want to rent out an apartment as fast as they can to offset those expenses with your rental income. Additionally, most landlords don’t enjoy the hassle of showing apartments and screening tenants so they want to finish this process as quickly as they can.
This again presents an opportunity for you. If you show the landlord that you can move fast, you can often negotiate a lower rent. The way you can do this is by having all of your information and required documents ready to go so you can send them directly to the landlord as soon as they ask. Check out our post on required rental documents to see what you need before renting an apartment.
Step 3: Understand the Seasonality Impacts
Seasonality can have a significant impact on rent prices in major cities. Summer tends to be considered the peak season due to large numbers of graduating students moving into the city. During these peak seasons, demand for apartments is high, and as a result landlords and brokers are less likely to negotiate rent prices. On the other hand, during the off-season, generally outside summer and early fall, landlords and brokers are more willing to negotiate prices. If you are able to time your move so your move-in date lands in the off-season, you can save a considerable amount on rent.
If your lease ends in an off-season month, you may be able to negotiate a lower rent if you extend the lease so it ends during the peak season. For example, if your lease is set to end in November, your landlord would much prefer that the lease ends in July. You could offer sign an extended lease if the landlord offers to reduce the rent by a certain amount per month. Obviously though that puts you back into the peak season for your next apartment so you will need to weigh the benefit carefully.
But what if you have to move during peak season? You will have less leverage, but you still have a chance to negotiate. Keep reading to find out how you can increase your chance of successfully negotiating your rent.
Step 4: Know which parts of your lease offer you the most leverage
Aside from price, there are several other classic lease terms that offer you the opportunity to negotiate including concessions, lease term, security deposit and building fees.
Concessions refer most typically to free months of rent. For example, it is fairly common to see a listing for an apartment with a 12-month lease, one month free. Why do landlords in NYC offer rent concessions? We cover that in a separate post on why rent concessions are so popular in NYC.
Concessions are your strongest opportunity to reduce the rent you pay. It is often much easier to lower your rent with additional concessions than it is to lower the gross rent. To figure out how a month free translates into a lower effective monthly rent, you can use the Effective Rent Calculator here.
The lease term is your next best opportunity to lower your rent payment. Most of the time, landlords would prefer a tenant that rents an apartment for 2 or 3 years to one that is out in 1 year. As a result, they are often willing to lower the rent if you extend the duration of your lease. The risk you take as a renter is that you don’t like the apartment or need to move in a year. Therefore you need to balance the savings with the risk you get stuck in a longer-lease you end up needing to get out of.
The security deposit is also an opportunity to negotiate. Typically, apartments will ask for one months rent as a security deposit. This is also the maximum amount they can legally ask for under NYC housing laws. However, you can try to negotiate a lower up-front amount. Additionally, if the security deposit is lower than one month’s rent, you can also try to negotiate a lower monthly rent if you pay a higher security deposit.
Building fees are another important category to consider when negotiating your rent. Many buildings have amenities fees, pet fees or maintenance fees. Although it may seem as if these are all set in stone, everything is negotiable, and this category offers you yet another opportunity to try and reduce the amount you pay for rent.
Lastly, if there are any other fees associated with your rental, don’t be afraid to include these in any negotiation conversations. Ultimately the landlord has to balance two competing forces: 1) maximizing the amount of rent and fees they collect from you and 2) minimizing the amount of time it takes them to rent an apartment. It’s up to you to try and use the pressure of 2 to reduce 1.
Step 5: Be professional and respectful
This point holds true to all negotiations but the most important part of a successful negotiation is your ability to remain calm and polite. Using the information you have from above, you will be able to present a clear and compelling case for why the rent you pay should be lower than the listing rent.
Unfortunately, some landlords and brokers in NYC can be rude and prickly and wont always respond in a positive manner. Which brings us to our last step.
Step 6: Have a Backup Plan and Know When to Walk Away
Not every negotiation will be successful. That’s why it’s important to have a backup plan and know when you’re willing to walk away. Having a list of multiple apartments, you’re interested in is a key part of the apartment search. This way you have several strong backup options in case your preferred option doesn’t work out.
If the landlord or the broker you’re negotiating with isn’t budging on rent, don’t get flustered. Simply check to see if the final rent is in your budget and if you’re comfortable paying it. If it is, amazing you found yourself your new apartment. If not, don’t worry about it, on to the next one!
Wrapping it up
So for a quick recap, here our your 6 steps to lower your monthly rent:
Figure out the market rent for similar apartments with RentPeek.
Understand the incentives of your counterparty
Determine if you are in peak or off-peak rental season
Understand which lease terms offer the most opportunity for negotiation
Be respectful and professional during negotiations
Be ready to walk away
By following these tips, you can increase your chances of negotiating a better deal on your rent. With the money you save, you can put it towards other important things in your life or even invest in your future.