How to save on rent without moving

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If you’re a renter, there’s a good chance you’ve thought of moving in the last year – whether in search of savings, more space, or both. But what if you could lower your costs without budging?

You probably already know that national rents have plummeted to multiyear lows. If the average asking price for the one-bedroom you were eyeing was $2,000 two years ago, it’s dropped to about $1,880 today – and even more in certain cities.

But landlords also face added costs when finding a new tenant. Posting a listing on real estate database MLS with a realtor, for example, costs about one month’s rent, plus HST in commission (roughly $3,390 on a unit listed for $3,000 a month – and about half of that even if a landlord chooses to forego the realtor).

“It’s still in the landlord’s best interest to keep a great tenant,” said Toronto-based realtor Matt Phillips, whose videos on topics such as negotiating rent have racked up thousands of views.

Negotiating with your current landlord can be the best bet to save – if you do it right.

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“Normally, this conversation is prompted by a rental increase,” Mr. Phillips said. In Ontario and B.C., tenants can face hikes of more than 2 per cent after their first year in rent-controlled apartments, and well beyond that amount for units not subject to this policy.

Today’s icy market provides an opening for tenants to start the conversation sooner.

But before rushing to point out all the cheaper units in the building to your landlord, Mr. Phillips suggests you ask yourself: How willing are you to move if talks don’t pan out?

“If you’re like, ‘Hey, if they don’t decrease my rent, I would still stay in my unit’ … that kind of sounds like fishing,” he said. Although there’s nothing inherently wrong with that, he’s seen it sour landlord-tenant relationships.

As a rule of thumb, if after a year the market rate for your unit has dropped by $100 to $200 and your landlord has not raised your rent, Mr. Phillips thinks negotiating isn’t worth it. “Those small adjustments are just a reality of any real estate market.”

If, however, the market rate has dropped by $300 or more and you see similar units in your building going that much lower, that’s a good time to reach out to your landlord, he said. Someone paying $3,000, for example, and seeing a unit go for $2,700 or lower, can try asking for around $100 to $150 off.

Once you decide to start the conversation with your landlord, put it in writing. “Talking on the phone, you’re saying things on the fly,” Mr. Phillips said. “You don’t want your emotion to cloud anything.”

Over e-mail, open up by focusing on your relationship, he said. “Like, ‘Hey, we really love being here, we really loved you as our landlord, we don’t want to move – but financially, this is what makes sense for us right now.’”

Don’t hesitate to boast by adding, “We’ve been great tenants, we paid on time – why don’t you even come do your annual inspection just to see how well we keep this unit,” he said.

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Next, break down the numbers. Mr. Phillips suggests unpacking how much you’re paying – or being asked to pay – in comparison to the rate for similar units in the same building, along with any MLS or ancillary fees your landlord might face to find new tenants, broken down monthly.

It goes without saying that these negotiating tips only work if you’re a good tenant. It’s also trickier to haggle with inexperienced landlords willing to take a gamble, said Mr. Phillips, along with large property managers better positioned to absorb intermittent losses.

Even if a landlord accepts a proposal, it might be in exchange for concessions, such as asking to sign another one-year lease after a tenant has already switched to month-to-month payments, tying them further. They may also counter with a temporary discount, in which case it’s important to clarify whether the next rent increase will be tacked onto the initial, higher rent price.

Have you ever successfully negotiated a rent decrease? What strategies worked and which didn’t? Drop me a line at mpostelnyak@globeandmail.com.

And on the topic of renting, check out this recent Stress Test podcast episode, where we unpack whether news of falling rents always matches the reality on the ground.

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