How to negotiate a lower rent? This has always been one of the frequently asked questions among tenants.
When listing down our list of must-haves in a house, we would ensure that we put in an affordable monthly rent towards the top of the list.
Ensuring we do not overspend and go over our rental budget and pay our bills to avoid getting evicted is definitely at the forefront of every tenants’ mind, no matter the property.
Despite that, do not take the displayed price tag at face value since we can still haggle with the real estate agent or landlord. That is right; if you wonder whether “can I negotiate rent price?” you can safely assume that the advertised rent is still a negotiable asking price.
It is a daunting concept to negotiate on a property price of all things, but it is worth it in the long run. So how to negotiate rent? How does one go around asking the landlord to lower rent? Let this guide help you learn how to negotiate a lower rent.
Research The Property The Market Value
Firstly, when doing rent negotiation, we must be well-equipped with the knowledge of the area, specifically in the property market value of the area. So why is it important to research the property market value?
Rental market value is dependent on the location and the available amenities which can increase the worth of the property.
Another factor to take in when researching property market value is making comparisons with other rental properties in the area.
When comparing rental costs with other rental properties, we must ensure that the type of property is of a similar build.
If the house we are hoping to lease is a double-storey landed house, we have to only compare it with other double-storey landed houses.
We can have a rough idea of how low we can negotiate for a rent reduction. For example, if the property’s asking price is RM2300 monthly and after doing our research we discovered properties in the same area with lower rentals.
Those lower rentals can be your baseline in determining your starting price in the negotiation.
Bear in mind that we have to keep the negotiation reasonable, so expecting the landlord to cut a thousand bucks off is impossible.
Always start with a price lower than your goal, so maybe you want to aim for RM2000; therefore you can quote with RM1700 first.
After further negotiation, you may reach your desired rental price. Cutting off RM300 is not as drastic as cutting off a thousand Ringgit.
Be Prepared To Give Up Some Things In Return
Understand that sometimes when negotiating rent prices, we have to be prepared to give up some things in return.
Some landlords are only willing to agree on a lower rent if there is a benefit to them.
A few of the things that you might have to surrender may include house repairs, new furnishings or even a parking space in exchange for the cut.
So if the rental comes with furniture, do not expect it to be brand new, they are very likely second-hand furniture.
In other situations, the negotiation can also involve tenants having to waive their deposits (security, utility, booking) in exchange for the reduction.
Needing to give up certain things may seem daunting in the beginning but when you are settled in and paying off that monthly rent at a lower price, you know it will be worth it.
Commit To A Longer Lease Period
Another tool to use in your arsenal of persuasion when it comes to negotiating is to commit to a longer lease period. Here is why;
Every landlord detests the period of time where their rentals remain vacant and they most definitely dislike having to go through the process of having to screen every candidate every 3 to 6 months.
It is a phase where effort and money are used the most, having to hire personnel to investigate the candidate’s background and having to spend time as well as energy going through the negotiation process.
It would be an even bigger waste of time if the negotiation was a failure, forcing the landlord to restart the search process. It is the most stressful time for landlords.
Therefore, you as the potential tenant can convince the landlord into seeing things your way by baiting them with a longer lease period such as a 12-month lease.
Common lease periods are a year, entice them by offering to rent their property for longer durations of maybe two to three years.
Nevertheless, do not forget to put in early termination and lease renewal clause in your tenancy agreement, should you be put into a situation whereby you are pushed to make those decisions.
Negotiate Your Terms At The Right Time
Another vital piece of information to know is when to negotiate.
When you negotiate your terms at the right time, there is a higher possibility of getting your negotiated rental price and if you can even negotiate even better lease terms.
So how do we know when is the right time to negotiate our terms? You would have to exert a bit of sleuthing skills to learn more about the property you are interested in.
Information such as if the house has been on the market for a long time, whether there is any problem with the house, anything and everything about the house’s history can be useful.
If the house has not been rented for a long time you can use that information when negotiating, emphasise to the landlord that they have had a vacant property and you are interested in making their worries go away, but with a bit of incentive which is rent reduction.
Another appropriate moment to start negotiating on lowering rental costs is when the market is not doing well.
Things affecting the property investment market like economic crashes and pandemics can be reasons for landlords to be more agreeable to your demands.
That is right, you can definitely negotiate for rent reduction during the covid-19 pandemic.
During this pandemic where a lot of people are losing income, which person would turn away any source of money? Even if it is at a reduced price.
Get Your Negotiated Rental Price In Black and White
After the negotiation is done, ensure to get your negotiated rental price in black and white.
In other words, make sure the agreed-upon new rental price is written in the tenancy agreement as only then it is official that you are successful in your bid to lower the rental cost.
Besides the new rental price, every new detail that was negotiated are to also be put in the tenancy agreement.
Things such as the state of the property that the tenant agreed to lease, what the tenant has relinquished in exchange for the lower price, the obligations of both parties during the lease period and other pertinent information regarding the rental.
By having it printed in the tenancy agreement also means that it is witnessed and approved by Malaysia Inland Revenue Authority or Lembaga Hasil Dalam Negeri Malaysia (LHDN).
Meaning if there is any need to get the court involved, everything that has been negotiated is legal and you will not have to worry about that.
Easiest Way You Can Negotiate Your Rent Online
Additionally, there is an even easier way to negotiate your rent online, and that is through SPEEDHOME.
With SPEEDHOME, tenants can browse through over a thousand options to find the property they want to rent.
The properties that are open for negotiation will have the ‘This rental is negotiable’ sign.
When a property finally catches your eye, you can chat directly with the landlord through the ‘chat with owner’ option.
Through this option you can get to know each other better to see if you are compatible to be tenant and landlord, you can also book an appointment to view the property in person.
When you find the property satisfactory you can start negotiating terms and conditions through the ‘chat with owner’ option.
Everything else will also be settled through SPEEDHOME, from the tenancy agreement signing all the way to rental payment etc.
Now that you have learnt a thing or two about negotiating the rental price, go on and try it out but also remember to pay rent on time!
Practice makes perfect, and keep in mind not all property is open for negotiation nor are all landlords interested in negotiating.