Michael Lawson - Best renting agent I have ever dealt with. Turnaround time for maintenance is great. Reported to Greg in the morning that my shower head was leaking, plumber there that afternoon. Thanks Greg, really approachable your professionalism.
Moving to a new rental property offers a myriad of new opportunities. You might be upgrading to a larger home, adding a bedroom, leaving a share house or moving to be closer to work.
However, negotiating cheaper payments when moving to a new rental is often overlooked. Contrary to what many renters may assume, advertised rents are not set in stone.
With the right assessment, evidence and offer, you can secure a bargain on your next rental.
Gauge the competition
If a landlord is struggling to secure a tenant, they’re more likely to be open to negotiating on price.
There are a few signals indicating limited competition for a rental, says Tenants’ Union NSW chief executive Leo Patterson Ross.
The most obvious is scoping out the number of people attending inspections. If there’s a line outside the door, your chances will be slim.
“Another is knowing what similar properties are going for in the area,” Ross says. “If you know that there are 10 properties that are similar and essentially the same level of fit-out, and they’re all going for less than this place is advertised for, then that’s a pretty strong signal.”
Ross says if you’re noticing that the same listing appears in your search for weeks, it could be ripe for bargaining – but could also go the other way.
“If a place has been advertised for a long time, then that indicates that they’re not getting the interest. It can indicate the opposite way too; that they don’t really mind that they don’t get the place rented quickly and so they’re immune to [lower] offers,” he says.
It’s crucial to have concrete evidence demonstrating that the asking rent is overpriced. This evidence can take the form of comparable rental listings and wider market conditions.
“Rent is generally based on similar properties in the market – current homes and homes rented in the past month and what prices were achieved,” Kaitlyn Schneider, property management department manager at Ray White Holland Park, says.
To prove a property is overpriced, Schneider says you need to provide the agent with links to similar properties in your search that are priced lower than the one you’re applying for.
“It could be that the property manager is already telling the owner and that they need to hear it from somebody else. I’ll always consider an applicant asking for a reduced price if they can provide me the evidence and have actually looked.”
Vacancy rates also give an indication of the ratio of empty rental properties relative to the number of total rental properties. The national vacancy rate rose 70 basis points to 2.5 per cent in April. This was due to an increase in new rental listings from mid-March as tourism restrictions meant short-term rentals were put on the private market, as well as a decline in demand from renters as a result of the economic effects of COVID-19.
For cities like Sydney and Melbourne, this means the number of vacant rentals is at a three-year high and rising vacancy rates usually point to an imminent drop in rent. If you’re searching in a capital city, quarterly rental reports can also shed light on whether prices are dropping.
Learn where else to compromise
There are other aspects in your rental agreement where you can compromise to shave money off your rent.
“From the landlord’s perspective, spending a grand getting the place repainted ends up costing them less than dropping the rent by $30 a week. It may be that you help them do the improvements, and ask for a cheaper rent,” Ross says.
Schneider agrees, pointing to garden and pool maintenance as tools for bargaining down the price of your rent.
“As an incentive to move into a property, the owner will put up that they’ll include lawn maintenance. You can offer to do the maintenance yourself and ask for a reduction and you’re looking at $10 to $20 less per week,” she says.
How low should you go?
Once you have a clear understanding of the competition and market surrounding a rental property, you should have an idea of whether a lower offer is possible.
Choosing what number to offer is a balancing act, Ross says. He suggests using your evidence-based argument based on comparable properties as your benchmark so you don’t put the agent off your application all together.
“The balance you need to take into account is if you shoot too low, the agent either thinks you’re not being serious or you risk that somebody else made another offer to negotiate down but they didn’t drop it as far as you did.”