Hacker News Reader

Comment by taylorhou | Hacker News Reader

If I were a renter right now and in an urban area with a lease renewal coming due, I'd 1000% call the mgmt co's bluff.

Context: my firm provides back office services to 50k+ rental units across the nation and unless you're in some oddly hot market, most mgmt companies currently are holding their breath that their renters don't say anything and renew at the same price.

If you're reasonable, you can easily negotiate a price drop and the mgmt co will most likely accept it begrudgingly because they do not have the data to call YOUR bluff. every mgmt co right now is taking whatever they can get and locking it down for as long as they can.

happy to respond to individual folks questions but keep in mind that any advice I may provide is not legal nor financial and I guess I should say my posts/comments are my own and do not represent my company's. =)

View on HN

We just canceled our lease two weeks ago. We had a large apartment in one of the new high-rises in Downtown LA.

The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking.

Other buildings are offering by default two months rent-free and they will pay the movers if you decide to move in.

DTLA is a special place as it has plenty of new supply, but I can imagine that it's not too different in other places across LA.

For added context and to build off your last point, for years it has been relatively standard for luxury rentals in DTLA to offer somewhere between 4-8 weeks free rent. It might be more appropriate to view this as a single free month with free parking when comparing to other markets.

Thank you, that's a good context. In the building where we moved in 3 years ago from SF, they didn't offer any free rent at point as they were completely full.

However, the larger point stand. Most building did offer around a month of free rent to new tenants in last couple of years.

Interesting, I got 4 weeks free when I moved to the area in 2017. Although I am sure there were places that didn't offer that. The closer a place gets to being full, the more important it is to renew leases at the full sticker price rather than reaching 100% occupancy. I know I was able to bargain down my rent during my last lease renewal because the building was still offering free rent to new residents.

We renegotiated 3 times a significant discounts as more supply started seeping in. In our last renewal we got 3 months free and 1 parking spot free.

Whenever we spoke with neighbors they were so thankful that they didn't increase the price that they immediately signed. In fact of the maybe 20 people we spoke over the years, none attempted to renegotiate their lease.

My expectation is as PPP is now running its course a lot of white collar jobs will be terminated which will put pressure on the housing market as whole. I believe we should see a dramatic drop in prices by early next year (nobody really buys/sells during holidays).

How do you renegotiate? It seems like you need to be willing to walk to have any negotiating leverage, and moving is a pain in the ass.

That’s correct. I’m ready to move. I found out that the pain is not as bad as it seems and I actually like moving.

But even if you don’t like it, there is little to be lost. The worst they can do is to say no and then you pay whatever rate they asked for if you decide to stay.

I tend to reside in more expensive buildings so they have harder time finding tenants. That’s why I ask for the costs of finding a new tenant as a discount.

This only works in falling market or in market with plentiful of supply. When we lived in SF we paid what they asked for.

> That’s why I ask for the costs of finding a new tenant as a discount.

Great stuff. Thank you for the reply!

Finding desirable tenants can sometimes be a pain in the ass too. But being willing to walk away is, of course, the best negotiating position.

That's right. I tend to negotiate less on the initial lease and negotiate more on its renewal as we prove that we are a valuable tenant (paying on time, low interaction, ...).

Even when we lived in SF, where negotiations were almost impossible as they would have filled the unit within a week, they still were willing to do something in order to retain us.

absolutely this. whenever our PMs come to us with tenant requests for discounts and we (upper management) take a single look at their ledger of on-time and online payments, we immediately do a back of the napkin calculation of the cost of a turnover vs the discount and even if its in a turnover's favor, we usually say give it to them because of the uncertainty of turnovers.

think of the analogy "even money" in blackjack - when the dealer is showing an Ace but you've got blackjack, most objective people will take the "even money" versus gamble against whether the dealer has BJ or not. also why you tend to not split tens unless you're counting =p

I'm guessing the freebies are to avoid lowering the actual rent due to Prop 13?

If I'm not incorrect this doesn't apply to newer properties.

Generally it introduces more complexity in the process so tenants can't easily share and get outraged by different rent levels, because everyone is "paying the same". So if you rent is $3k/month but you don't have to pay for 2 months, you are still going to pay $3k.

Additionally once the lease is up you are starting with $3k baseline rather than $2,500.

I think you mean rent control, not prop 13.

Anyhow this commenter sounds like they know what they're talking about and are saying that landlords in SF cannot beat rent control in this manner: https://socketsite.com/archives/2020/06/complimentary-rent-o...

Ack, you're right, I did!

The value of commercial (ie 4 or more units) rental property is calculated directly from the rent it can command and you can find yourself upside down on a loan I’d your rent dips too far. This is also why you’ll find places would rather have vacant apartments than lower rent too far.

> The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking.

Someone should make a website to share offers that they received like this. It would be super helpful to better understand your local market and negotiate come renewal time.

Someone should indeed.

> We just canceled our lease two weeks ago. We had a large apartment in one of the new high-rises in Downtown LA.

> The last offer was 3 months free and 2 parking spaces free if we stay for 12 month lease, which comes to 34% discount on the rent including parking.

That's weird how everytime I discover something new about "free market" in USA, I'm glad to live in Europe.

Having to negotiate your lease like you would with a bag of apples seems insane to me since rents are regulated as are drops or increases in an occurring lease.

I'm originally from Europe. I do like that I can negotiate better terms than the market, but I also acknowledge that this is not better system for everyone.

The benefit of the US system is that higher rents create more incentive to produce more supply. It sometimes breaks down, like it did in SF, but in DTLA this worked well. Developers smelled opportunity, build bunch of new apartment buildings and we were able to lower our rent by 35% just within 14 months.

If the market was regulated, then no new supply would be produced as there is no incentive to do so.

Do you see this in non-hot markets as well (aka the Midwest)? My lease is up in July, and I don't really want to move, but any chance to knock even $50 off my monthly rent would be nice.

Give it a try, you’ve got nothing to loose. And also look around, you might find something better for the same price or cheaper and possibly nearby. Your landlord would loose a lot more if they don’t make a counter-offer, especially if you’ve been a good tenant

to give some context (depending on your rent) but anytime a landlord/PM has to place a new tenant, there are leasing fees/commissions (usually) that equate to between 1/2 to a full month's rent. so if your rent is $1000/month, at a $500 leasing fee to the landlord for a new tenant, they are better off just giving you a $40/month discount (minimum) if you just consider the commission.

they also have to deal with make ready costs, time, and potentially vacancy which any landlord who is objective would gladly say "you want $50/month off your rent? done!" - i would at least.

the only time this doesn't work is in a "hot" rental market where the landlord/PM can charge more for rent and/or have a waitlist (in multifamily scenarios)

Thanks for the insight. Any perspective on NYC specifically?

Lots of people are moving Upstate from NYC and relatively few new people are moving in: schools are closed. During this time of the year lots of youngsters would normally move in but that is not the case. Rents should drop for sure. Realtors are also bluffing the price up because of a higher omission they get.

Anecdote: I know a realtor who jacked up the price of an apartment in Queens by $250 because it was supposedly under the market price and the landlord priced it wrong. That realtor found the people to move in, but I think what they did was utterly wrong, greedy, etc

So insist, look around and don’t settle for less (in this case for more than you're willing to pay for, and subtract some from that). If there was a good time to bargain now is the time. Be picky! I've seen such oddities in this dirty city, apartments a few feet from the train station - imagine the unbearable noise - which rent for nearly the market price minus 1-200. I've seen apartments with caved in floors rent for almost the market price.

I have no insight into other buildings but management where I live, a pricey 400+ unit in LIC, haven’t budged on anyone’s rent as leases end. Everyone we socialize with (we have a small daughter and there used to be a big crew of babies) has either left or is leaving in the next few months, the garage is less than half full — it’s a ghost town. They’re still raising rents and refused to negotiate with anyone we know. The building is rent stabilized so maybe they fear that lowering the rent will make it impossible for them to hit certain numbers over the next few years?

> The building is rent stabilized so maybe they fear that lowering the rent will make it impossible for them to hit certain numbers over the next few years?

A friend of mine was speculating this as well -- that the market hasn't moved as much as it could because landlords are worried about getting “locked in” at a lower rate. My hunch is that it's not entirely true yet, or else we'd be seeing more concessions (free first month, etc.) that don't impact the stabilized price -- at least in my Manhattan building, even concessions that have been offered (off and on) under normal circumstances are not listed any more.

NY is a weird place where you can see same vacant retail spaces sit on teh market for years and years with landlords unwilling to budge doe to perceived loss of paper building value.

I didn’t try to negotiate down, but I did move up to a much nicer apartment for essentially the same price.

that's essentially the same thing! congrats!!

Reply on news.ycombinator.com