You’ve reached the end of your lease, and your landlord wants to increase your rent. This situation can certainly be frustrating, and many people’s first instinct is to grab some moving boxes and write their notice of intent to vacate. But after the initial shock wears off, it’s time to start thinking about your options. Here are some of the most important things to consider when your rent goes up.
How to Negotiate Your Increased Rent Payment
After reviewing your budget, you may have concluded that you’d need to make substantial or undesirable lifestyle changes in order to afford the increase. But you can take important steps to potentially reduce your payment based on whether you rent from a private owner or a corporation.
Renting from a Private Owner
If you rent from a private individual, you might be able to negotiate your rent.
Start with a professional, honest conversation with your landlord. Explain that you enjoy living in your current house or apartment, but you can’t afford the increased payment and might have to move. Good tenants are hard to find, so your landlord might agree to work with your budget if you have a history of paying your rent on time.
If you have a fixed-term agreement, ask your landlord if they’d agree to a one- or two-year lease extension. They may be willing to agree to a lower payment in exchange for not having to search for a new tenant during that time. However, make sure you’re not extending your lease just for money’s sake — this is a long-term commitment that needs to coincide with your future goals.
Another option is to consider what additional costs your landlord has that are associated with your apartment or home and whether you can help alleviate any of them. For instance, if you’re renting a location with an outside space, is your landlord paying for someone to provide lawncare? If mowing the lawn is a task you’d be willing to take on, you could present an option where you take on this responsibility in exchange for a lower rent payment.
Renting from a Corporation
Alternatively, you might live in a large apartment complex owned by a company. In this case, you may receive a letter stating your new rate and prompting you to either agree to the new terms or move out by a specific date. These types of situations don’t typically come with an option for negotiation.
Call your property management company to ask if they’re open to discussing the increase and set up a meeting. However, keep in mind that those who work for commercial organizations have less freedom to negotiate pricing than a private owner.
Things to Consider Before Making a Decision
Before you start browsing real estate listings or handing over extra cash, take the time to think through your options thoroughly if you were unable to decrease your new payment. Since this is a big decision that will impact your financial future, you’ll want to keep several things in mind before you choose to move to another property or pay the increased rent.
- Compare rent prices in the area: Take a look at comparable properties in your area. If the rent increase is similar to or less than the average market price, moving might not be in your best interest. However, if your landlord is raising the rent beyond the market average and won’t negotiate, it might be time to move on.
- Consider your current utility costs: Does your current payment include expenses such as heat, water, or trash pickup? If your current property includes costs not typically included in a lease, you might still save money by paying more rent as opposed to moving to a property where you’ll have to pay for these expenses separately.
- Consider the season: Summer is typically considered the busy season of real estate. Apartments lease for more in the summer than during any other time of year, and demand is at its peak. If your landlord increases your rent during the summer, you might not save money by switching to a different apartment during this more on-demand time. You could consider asking to renew for a shorter term that would free you up to move during fall or winter, when competitors’ rent prices may be lower.
- Reevaluate your situation: Think about your personal situation, including your short- and long-term goals. Is this a good time to consider buying your own home? Would it be beneficial to move to another location closer to your job? This increase could open the door to better financial and personal opportunities.
How to Prepare for Your Increased Rent Payment
Have you decided to stay at your current property? If so, you might need to cut back on spending and make better financial choices in order to afford your new payment comfortably.
Fortunately, there are plenty of easy ways to save money without reducing your quality of life. Try some of these tips below.
- Research utility options and use utilities wisely: If you pay for utilities separately from your rent payment, do some research. Does your current company offer the cheapest option available? Shop around to find the best rates in your area. You can also save by turning down the heat or A/C, washing your clothes on a cold cycle, and turning off all your lights when you aren’t home.
- Track your spending: If you haven’t already done so, create a budget. Then track your spending to easily identify any frivolous expenses. Chances are that you’ll find several areas where you can trim unnecessary costs and readjust your budget.
- Make some extra cash: Plenty of small side jobs can provide you with the extra money you need to afford your increased rent payment more comfortably. Turn your hobby into a supplemental income or sell your unused valuables on an e-commerce site.
- Streamline other expenses: Can you reduce any necessary monthly expenses? Consider transferring your high-interest credit card debt to a lower-interest card or refinancing your auto loan.
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