How to bite the bullet and ask your landlord for cheaper rent
The economic impact of the pandemic has left many tenants with little choice but to apply for rental assistance. While government payments have helped cushion the blow, many people are struggling to afford their rent, and the property market has suffered as a result.
Rental vacancies have skyrocketed in recent months as people return home or move in with others to cut costs. This surge in vacant properties has left some landlords with little choice but to drop their weekly rent in a bid to lure tenants.
Recent property data shows that over a third of Sydney rentals (36.7%) have been discounted since the pandemic began. Prices in the Sydney CBD have dropped by as much as $100 per week compared to the same time last year, with the median rent price decreasing by 11.11% in Vaucluse and between 9% and 10% in Ultimo, Waverly and Bondi.
It's a similar story in Melbourne, with 33% of rentals offering a discount during this time. The median rental price has dipped by as much as 11% in Southbank and 10% in Melbourne city. Prices have also dropped in Tasmania where almost 1 in 4 rentals (24.5%) have lowered their asking price, followed by 24% of Queensland rentals.
This widespread drop in rental prices puts tenants in a stronger position than they've been in for years. There is now more scope for people to seek out their ideal rental in a market that has previously been highly competitive - and expensive.
It appears that cheaper rent isn't off the table, even if your financial situation hasn't changed. But what if your landlord is yet to offer a discount? While legally they don't have to lower their prices, it can be worth trying to negotiate a better offer.
Below are some useful tips for negotiating cheaper rent with your landlord to save money.
1. Check your rental agreement
Before you begin negotiating, ask yourself how far you're willing to go. If your landlord won't meet your price expectations, are you willing to terminate the lease early and move elsewhere? If so, make sure you read over your lease agreement first.
Breaking a lease can cost thousands of dollars, and you don't want to jeopardise your bond. It's important to understand how much money is at stake before jumping ship (or threatening to).
It is possible to terminate a lease early provided that you and your landlord come to a mutual agreement first. If this is the case, make sure to get any agreements around liability or cost in writing.
2. Do some digging
If you're going to ask for a rent discount, don't come to the negotiating table empty-handed. You need to provide plenty of proof that prices are dropping in your area.
Visit a real estate website and look up similar properties in your suburb. Check the current weekly price and whether this has dipped in recent months.
If you live in NSW, the Tenants Union of NSW has a rent tracking tool, where you can look up prices in your area and see whether they've been increasing or decreasing over time.
If you want to go even further, you can also look up the percentage of vacant rentals in your area. Websites like SQM Research provide information on the vacancy rate for rental properties by postcode which can help to support your case. If you can prove to your landlord that vacancies are increasing in your suburb, they may be more willing to entice you to stay.
3. Work out how you're going to ask
Once you've compiled your proof, you need to decide how you want to present it to your landlord or property manager. This might be a face-to-face meeting or a letter.
If you decide to write a letter, there are plenty of example templates online you can use as a starting point. Make sure you're calm, respectful and to the point.
Consider other factors that may help your case. For instance, are you willing to sign a longer lease if your landlord drops their price? If they can see you're willing to negotiate as well, they may be more inclined to consider your offer.