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Tips for Negotiating Leases and How to Avoid Scams

  • Writer: Rene Perez
    Rene Perez
  • May 16, 2024
  • 4 min read

Leasing and buying real estate can be a headache. Below are some tips that will help you in the process of leasing a property.


Remember, always ask! The worst thing they can do is say no. Of course, be respectful and conscious of what you’re asking.


What Should I Negotiate?


1. Price Reductions

  • Propose a reduced rent for committing to a longer lease.

(15 months - 2 years often give a layer of flexibility)

  • Prepayment Discounts: Offer to pay several months' rent upfront for a lower monthly rate.

  • Have a baseline of what other properties are going for. Ask for X price reduction.


Example: If rent is $1,000 say $850. Odds are that they could counter with something like $925.

If they say no, the beauty of looking for rentals way ahead of time is that you can walk away and see if they reach back out. Remember, knowing when to walk away can be the strongest form of negotiation.

Example script when talking to a leasing agent:


"I’m super interested in this unit, but unfortunately it’s a little above our budget of what  we are looking for. Is the rent negotiable? Would you mind sharing what the current tenants are paying?"


Leasing agents usually want to get the deal done. Most of them talk too much. Some might share that the current tenants are paying less and the leasing agent might give you a bottom line price point.


2. Upgrade and Maintenance Requests


  • Ask for credits toward improvements or personalization of the space, such as painting or installing fixtures.

  • Maintenance Deals: Ask whether the landlord takes care of specific services like cleaning. If there are fees for supplemental services, ask for lower prices.


3. Security Deposit Negotiations


  • Lowered Deposits: Propose a lower security deposit.

  • Installment Plans: If a reduced deposit isn't possible, ask for the option to pay the deposit in installments.


Deposits are one way to spot scams, more on that below.


4. Utility and Service Inclusions


  • Utilities Included: Negotiate to have utilities (like water, gas, electricity) included in your rent

  • Internet and Cable: Request inclusion of internet and cable services, or at least a discounted rate through the landlord’s provider.


5. Parking and Storage


  • Included Parking: If applicable, ask for included or discounted parking spaces. Do not be afraid to ask for a free parking spot.

  • Storage Space: Negotiate for free or discounted access to on-site storage facilities.

Parking is one of the easiest items to negotiate in high rise rentals. Since this item does not lower the value of the comparable rents, property managers are more willing to drop the price of parking.

6. Renewal Guarantees


  • Fixed Renewal Rate: Request a guaranteed fixed or capped rent increase if you choose to renew your lease.


7. Waived Fees


  • Application or Processing Fees: Ask to have any application, processing, or administrative fees waived.

  • Amenity Fees: If the property has amenities, negotiate for waived or reduced amenity fees.

For example: most buildings have an event space that is offered for reservations. Request a lower price when reserving these spaces.


8. Contracts / Lease Conditions


Only attorneys can modify real estate contracts and give thorough explanations of contracts.


Make sure you understand your terms and conditions.


Here's an article that has some examples: ( I have not verified this source in its entirety and you should do your own diligence on its accuracy. )


If you think you're planning to purchase real estate during your lease period, one contingency that you might want to include in your rental is the ability to not have to pay an early termination fee if you move out due to a purchase of a home.

How To Spot a Scam


Here’s the bottom line. If it’s too good to be true, IT’S TOO GOOD TO BE TRUE.


There are no deals. If the price is much lower than expected, there will almost always be something wrong. One of the few exceptions is if you're somehow related to the landlord or have a specific connection to the landlord, in those cases a lower priced rent is not a scam, but rather a gift based out of kindness.


Red Flags 🚩:


  1. Lower than expected rent.

  2. Lower than expected deposit ( typical deposit is at least one months rent deposit )

  3. Unable to verify ownership: Ensure the person you're dealing with is the legitimate owner or authorized property manager.


Many people try to find deals through Facebook groups or craigslist . Verify that the poster is legitimate. If the rental property is in a large complex, try to find the developers website offering the same unit for rent.


How to verify:


  1. Look for the real estate professionals license number.

  2. Look whether the listing is found anywhere else.

  3. If the person looks to be out of state, find out if there is a legitimate reason.

4. Person is asking for cash upfront to view property.

5. Grammatical errors in listing.

6. No reviews of the company leasing the property.


If you aren't sure, always contact a known real estate professional like myself or an attorney!


Rene Perez Jr, Broker

DRE:02115618 NMLS ID: 2004448

PS: Start looking for places to rent way ahead of time. At least 2-3 Months. Being rushed will take away any leverage!

 
 
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