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Negotiating rent decrease

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  • 26-05-2009 11:52am
    #1
    dreamlogic
    Closed Accounts Posts: 196 ✭✭


    Anyone got any tips on negotiating a rent decrease? I've looked through the sticky above about decreases but I'm looking more for advice on how best to approach the question to get the best deal out of it.

    I'm paying €650/month(+ ESB separately) for a modest single apartment in Portobello. It's been the same price since Jan 07 when I moved in. This price was fair enough considering the area and the market at the time etc. But obviously it's a bit much for today. The landlord is approachable and I'm sure he'd agree to a decrease of some sort. I'm just wondering how much to ask for as I'm a bit out of touch with how much prices have dropped and is it in all areas etc. I'd been thinking 10% would be reasonable, bringing it down to $585?
    But now I'm thinking maybe I could go a bit lower...
    I've been half thinking of moving either if it meant getting better value elsewhere in the same area (but would prefer to stay where I am) so I'd be willing to push it a bit and see what he says...?
    I'm not tied to a lease agreement.
    I also know the LL isn't paying a mortgage.

    Thanks for any replies on this..


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    #2
    delly
    Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 7,683 Mod ✭✭✭✭delly


    Well I can't offer too much on negotiating, but if the landlord hasn't raised the rent during the boomtime, then is it fair to ask for a reduction now that things aren't going as well? Working on your theory the landlord could have asked for an increase in Jan. '08 long before the downturn was on the horizon, yet didn't.


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    #3
    domcq
    Registered Users Posts: 171 ✭✭domcq


    delly, are you a landlord by any chance!?


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    #4
    3DataModem
    Registered Users Posts: 3,994 ✭✭✭3DataModem


    dreamlogic wrote: »
    I've been half thinking of moving either if it meant getting better value elsewhere in the same area.

    My advice is to research other apartments in the area you would be willing to move to, and base your offer on that.

    You have to be prepared for what you will say if;
    - the landlord refuses your offer (you'll probably stay)
    - the landlord makes a counter offer (you'll probably agree)

    I've negotiated rent reductions and increases as both a landlord and tenant. I requested an increase from a tenant once and they refused, and I gave in. I also requested a significant reduction from a landlord once (in 2002) and they gave in.
    dreamlogic wrote: »
    I also know the LL isn't paying a mortgage.

    This means two things;
    - he is paying tax on the full amount of the rent (or at least he should be)
    - he has not benefited from interest rate reductions

    My advice; when offering the reduced amount give the landlord a verbal guarantee that you'll stay for X months. That is usually the clincher for me as a landlord.

    Also, have you been a good tenant in his eyes (not in your eyes!). If you never phone him, always pay on time, and give no trouble, then he'll probably take the 10% hit just to keep you.


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    #5
    domcq
    Registered Users Posts: 171 ✭✭domcq


    Definitly ask for a reduction. Suggest 15% and then you have left some room for negotiation. At least you'll know where you stand then.


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    #6
    delly
    Moderators, Home & Garden Moderators, Recreation & Hobbies Moderators Posts: 7,683 Mod ✭✭✭✭delly


    domcq wrote: »
    delly, are you a landlord by any chance!?

    No, not at all.

    But, if the landlord seems to be the small percentage of people who are fair in this world, he should also be treated fairly as well.


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    #7
    dreamlogic
    Closed Accounts Posts: 196 ✭✭dreamlogic


    delly wrote: »
    Working on your theory the landlord could have asked for an increase in Jan. '08 long before the downturn was on the horizon, yet didn't.
    He could probably have dropped it in Jan '09 either but he hasn't so... I actually didn't realise that rents had been dropping since that far back but it seems they have if this forum is anything to go by. I thought this was only really happening since April or so.
    3DataModem wrote: »
    This means two things;
    - he is paying tax on the full amount of the rent (or at least he should be)
    - he has not benefited from interest rate reductions
    Yeah all is above board with tax. Not sure what you mean about not benefiting from interest rate reductions?
    My advice; when offering the reduced amount give the landlord a verbal guarantee that you'll stay for X months. That is usually the clincher for me as a landlord.
    Thanks, yeah that makes sense now that you mention it.
    I'd commit to a year if it meant going down 15%.. maybe 6 months for 10%..
    I wonder if prices are set to drop much lower? I suppose it's hard to predict this though, probably just have to wait and see how it plays out...


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    #8
    dreamlogic
    Closed Accounts Posts: 196 ✭✭dreamlogic


    The landlord has been away so I haven't yet spoken to him about this. In the meantime I've been reconsidering. I will probably be meeting him on Mon/Tues and I'm going to suggest a drop of 20% instead of 15%. I've been looking around at prices and it seems that property prices have dropped by up to 25% in recent months. So I'm going to say €520 to him and that I'll have to consider moving if he doesn't agree to this.

    Here's a fairly random example of a similar price drop: http://www.thepropertypin.com/viewtopic.php?f=26&t=20384&sid=0cbea376cbc9a323a949fefc3cf95092
    Also it seems that prices show no sign of stabilising; they're going to continue dropping. So if I add in that I can guarantee I'll stay for say 9 months at €520, I'm hoping he'll see that as a good deal.

    Any thoughts on this would be welcome though. I don't want to come across as being unreasonable; it's just the reality of the market etc.


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    #9
    tenchi-fan
    Closed Accounts Posts: 3,339 ✭✭✭tenchi-fan


    dreamlogic wrote: »
    Any thoughts on this would be welcome though. I don't want to come across as being unreasonable; it's just the reality of the market etc.
    That's not unreasonable in the slightest.

    Delly is wrong. The landlord was charging you boom prices all along and if he was offered more by a tenant he knew would be loyal, he would have kicked you out. You should never pay more than market rates.

    The fact that he doesn't have a mortgage means you should definitely not feel you owe him any loyalty. Even if he had a mortgage his interest rate would be down at 2-3% so you'd still be due a reduction.

    Regarding negotiation:

    Consider how much it is worth, and keep that number in your head. That is your goal. Say, €570.

    Phone your Landlord. Tell your landlord you had to accept a pay cut at work, and there are a lot of cheaper properties in the area, that you're just after seeing one which was recently renovated and has wooden floors for €100 cheaper... which leads into..

    Scenario one, ask for a reduction, and the landlord will throw a figure at you.
    Your landlord will have expected you to ask for a reduction months ago. He will make you an offer of around €620, you should sound put out and hint that you were expecting around the 520-530 mark.

    Scenario two, the landlord will act surprised and ask how much you are looking for.
    Tell him "around the 520-530" mark.. The landlord will give you a more realistic figure.

    In either scenario, tell the landlord _you will sleep on it_... do not accept the offer on the spot (unless it is a good one!). He is a shrewd guy if he is into property and he will have anticipated this conversation so do not let him fluster you into making an immediate decision.

    The next day phone the landlord with your revised offer ... maybe 550... 560.... 570 . That works out as a saving of €1,000 a year.

    If the landlord won't give a large enough reduction you must be willing to find a new place to live.. unless you're happy to pay over the odds.

    I think the point I'm trying to get across is to be prepared, assertive and persuasive.


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