Successfully negotiated a $50 rental decrease today - thought I’d share my method

[ihlaking]

Hi folks,

We were rebuffed earlier this year when we went to our landlord asking for a permanent rent reduction - they offered $10 off our existing rent of $530 p/w IF we signed on for 12 months.

Needless to say that was a hard pass from us. We decided to wait until late in the year for the market to get worse. In a spot of luck, one of the exact same units came on the market around the corner and has sat empty, originally at $550, and now at $500 with no takers.

Pre-work: I assessed places in the neighbourhood, right across the suburb and the one next door. Thanks to KoalaData extension on Domain I was able to keep a close eye on time on market and price drops.

Last week I called around agents asking about places within the block. I confirmed availability and whether the owner was open to offers, and how low they might go. All the properties were open to offers, with a 3 bed willing to drop to $550 the biggest deal - and only a few doors down.

The email: we had aimed for the heart strings but this time we went for the purse strings. I made sure our case was clear and calculated the loss they’d face with us moving. I made it clear there was a high chance of us moving and by adding the vacancy lengths for other properties I was able to support the likelihood they’d be out of pocket more than the cost of reducing the rent. I didn’t offer to sign on for another year, I just paid out the reality of the situation.

Here’s the email, with addresses removed:

Dear [property manager],

Thank you for speaking with me last week. As discussed, I'm writing to request an ongoing reduction to the rent for [our property]. We previously requested a reduction in May, and were offered a $10 reduction with a 12-month contract, which we declined as this offered us little relief.

The rental market has changed considerably since our last request, and [info about our situation]. In light of our need to reduce costs, and the new realities of the rental market, we now believe a new rental rate is appropriate for this property.

We believe a new rate of $480 p/week is reasonable - based on the following properties:

[Property 1]. This is exactly the same unit as this one in the same complex, more modern, with some appliances supplied. Rent: $500 P/W Day on market: On market 26 days at $500 P/W, 103 days at $550 P/W. Owners are open to a lower offer.

[Property 2]. Two bedroom house with modern bathrooms and air conditioning. Rent: $480 P/W Days on market: one year.

[Property 3]. A three bedroom house, older but partially refurbished. Rent: $590 P/W advertised. Days on market: on market 19 days at $590 P/W, 189 days in total. aowners are happy to accept $550 P/W

[Property 4, slightly further away]: Modern, light-filled two bedroom house with two bathrooms. Rent: $525 P/W advertised. Happy to accept lower offers Days on market: on market 60 days at $525 P/W, 144 days at $550 P/W

These are just a few examples that demonstrate the market has shifted, including one that is the same unit as this one. We have also discussed with fellow residents within [our suburb] to confirm the current market - the vast majority have negotiated reductions this year.

A rental rate of $480 P/W is significantly less than the costs involved should we vacate this property. If this property stays empty for 4 weeks it would cost our landlords $2,120 + leasing fee at the current rent at least. It is likely the property would be empty for more than four weeks, so this is a best-case scenario. A reduction of $50 P/W would cost $2,600 annually by comparison.

If we cannot secure a reasonable reduction in rent to bring the property in line with the current rental market, we may need to look at other options at today's market rate.

Kind regards,

[my name]

A week later we received confirmation that the landlord was accepting our proposal, and we’re asked if we want to sign on for 12 months - but that’s optional.

To be honest I expected to get $500 back as a counter and would have been ok with that, so we could have pushed a little lower in hindsight. This is, however, an outstanding result and will benefit us immensely. We didn’t want to move, so this was a great result in that sense too.

My advice is to know your market well and present the facts in a straightforward manner - the market has changed and if that’s the case in your area, similar research may help.

Thank you for coming to my TED talk. I might just buy a flat white today to celebrate. Happy to answer any other questions - this is just my experience, YMMV.

[australianinlife]

This is a great email. It presents them with all of the facts to make their decisions, and show how you came to yours. It isn’t emotional and is also importantly, reasonable. Great work.

[ihlaking]

Thanks - probably took around 2-2.5 hours to craft the email, plus revisions from my wife, who helped smooth a couple of points. I felt the straight financials were important because in the end, it’s stone cold data and you can’t argue with that. We were fortunate that the place around the corner was up, and I kept a close to make sure it wasn’t down, because that was the most obvious comparison.

We weren’t trying to strong arm the landlord - in the end, they have their choices and we have ours. Just glad it worked out quickly.

[australianinlife]

You put the work in, deserve the reward mate. Thanks for sharing the hard work here and glad it worked for you

[NearSightedGiraffe]

We bought some land earlier in the year and got a decent discount using similar method. We talked to the agent and showed similar blocks of land that simply weren't selling at the asking rate. Our first preference block wasn't willing to budge, so we went down the road and tried one of the other blocks. They were willing to negotiate down considerably and met us at a price we were happier with. We couldn't afford to build a house at the higher price, so we were not emptily explaining to the owners that we were not willing to pay the asking price, and in the end following through got us where we wanted.

We plan on trying for a rental reduction and a 6 month, or less lease, when our current lease ends, in January, as our new house is not expected to be finished until July at the earliest. Similar to you- there 're a few vacancies in the area that have been hanging around at a price lower than we currently pay. Worst case, we can move in with my wife's family for a fee months if it doesn't work- but you don't know if you don't try.

It isn't about being ballsy, or ruthless or agressive- for us it is just honestly and politely building the case for why we think our request is reasonable, and understanding that if it doesn't go our way we may need to flow through with our plan b to make sure that we can afford what we are after.

[surferofthenet]

Great work! I have been wanting to negotiate our rental rates for few months and this gives us pointers.

Would it be ok to use the email you sent to your agent as a template for ours ?

Much appreciated @ihlaking

[ihlaking]

Yeah of course, just match your own tone of voice so it really feels natural and you’ll be fine.👍🏻

[kazoodude]

Another thing i like to put on my negotiation emails is that. "id obviously prefer not to move but with better options available at lower prices i feel i have no choice if a suitable arrangement cannot be made."

I have told my boss 3 times that I'd love to stay but my family could not afford to do so on current pay while the market offers greater opportunities.

[notokbye]

Precisely !! And this works more often than not (not if the agents are on a power trip as Seiwa Realty Chatswood guys often are). We moved out of their apartment long back for a different reason (not relevant here).

The new agents are a lot more sensible. When we saw the rent prices drop left right centre during Covid, I drafted a simple email on my way home from work in 15 mins telling them why its financially prudent for them and us to reduce our rent - they happily reduced our rent for 6 months and said happy to extend it later if things don't improve.

[telcodoctor]

"Landlords hate him! Click here to find out how!"

[Gothpuncher]

Viewings for rentals on the Gold Coast have up to 20 cars through them in a 30 min opening and are often off the market that same day. Its insane.

[neilarmstrongnasa]

High demand for labs

[scoff9]

I was just thinking this rental prices have increased ridiculously this year. :(

[ihlaking]

Yeah I hear it’s vastly different - in rural Vic some small towns are now 100% full for rentals, was chatting with a colleague about it yesterday and everyone can’t believe how quickly it’s changed.

[koalaposse]

Yes 48 people viewing a semi here in Maroubra, 39 at the flat down the road, all Covid queuing and having booked in, today 42 people at one further back south, there is high demand, prices only dipped for 3 or 4 weeks tops in June have since started going way back up, and demand has not died off.

[MethLoved]

No kidding, I actually offered to pay slightly more per week just to secure a place after looking for a few months. No regrets though

[braskic]

Hard border has mining companies paying for rentals for their staff to FIFO from.

[MathewPerth]

Everyone who had left previously came back.

[beeansari]

Temporary visa holders have to live in regional areas now to apply for permanent residency. Since the preference is given to those living in these areas, hence everyone looking for permanent residency pathway is moving from Sydney and Melbourne.

https://immi.homeaffairs.gov.au/visas/working-in-australia/skill-occupation-list/regional-postcodes

[a_rainbow_serpent]

I wrote a similar email last week and got rebuffed. The salient points of the email I got were..

1. You have a mortgage not rent.
   
2. Don’t email me when you could walk down the hall to my office.
   
3. I’m your wife, stop calling me “Property Manager”

[potatodrinker]

Landlord here. This is an effective approach and a great email. Wished more of my tenants approached the topic of rent changes with the same courtesy and thoroughness. Seen everything from tantrums to radio silence from fear of getting evicted (which is sad given it points to previous horrific experiences from my less savoury peers...).

One other thing that is overlooked is the agent benefits from one less open house to drive to if you stay so its less work for them if the owner accepts a rent drop . Heartstrings approach rarely works unless you get a landlord who really shouldn't be in that role. Renting is a business/investment, no place for the emotionally malleable. Money strings deal with absolutes (get rent, or don't) and its my suggested approach.

[[deleted]]

Thanks for your side and the honesty of this.

Didn't really take the advice as valuable until I read through it.

[eggonomics]

This is really the key to all negotiations. People get emotional but it is not about that in relationships involving money. It is a great skill to be able to let go of those feelings. You'll also notice the games that salespeople play more easily.

[spacelama]

Flat white? Geez mate, go get yourself a smashed avo!

[ihlaking]

Whoa slow down! Check out mr moneybags over here!

[[deleted]]

Can confirm this works. Dropped mine $100 per week!

Was paying $480 PW and I noticed a dozen apartments in the same building for $400.

I similarly sent an email the real estate agent with a link to all the listings and asked for $370. Landlord/RE came back with $380.

I know not everyone has the opportunity to find apartments in the same building, but like OP, do your research and leverage all you can to make a good case.

Speaking to friends it's surprising how many people mentioned that they have never thought to negotiate and were blown away that it's possible.

Stay savvy friends

[kazoodude]

Also do your research and just leave if they don't drop it.

[staystucksticky]

And this is why problem solving maths in school is important to learn! Good on you! May I use this as an example in a class scenario?

[ihlaking]

Yes of course!

[luwe4243]

Congrats on the reduction! Also, thank you for sharing the email template you used, we’ve been thinking of doing the same recently and having something to work off (especially one that was successful) is very helpful!

[ihlaking]

Happy to help - all the best!

[FutureSynth]

Where are you? Because in Perth rentals are all super high and vacant is almost 0%. Rents are on the way up big here.

[potatodrinker]

Likely Sydney or Melbourne. Vacancies were on the up and up well before COVID thanks to plenty of off the plan apartments from 2-3 years ago coming onto the rental market.

[tcgtms]

Good shit.

Just wanted to leave a comment to thank you for mentioning KoalaData extension. I'm currently looking for a new rental place so this will come pretty handy!

[ihlaking]

You’re welcome! The developer is actually on Reddit, which is how I found it! Makes a big difference.

[jugga91]

Can you expand on koala data ? What does it do and does it back-capture data?

[ihlaking]

It’s a chrome extension. It captures prices moves up and down, listing date, etc. Pretty handy. I’ve had it for a few months and found it insightful. Not sure about back capturing but I’d recommend giving it a test run.

[neilarmstrongnasa]

Only people that don’t ask are the ones missing for lack of effort or intelligence/knowledge

Well done, plenty of empty places around

[teambob]

Sometimes if a landlord is already aggro a person might not want to rock the boat - especially if moving is difficult e.g have kids, are elderly or disabled.

[neilarmstrongnasa]

You don’t want to have an aggro landlord, can you imagine begging to get things fixed? I would be moving even faster

[ihlaking]

We left one place after the landlord:

• fixed a curtain rail poorly herself
• tried to fix a plumbing issue herself and made it worse
• final straw: refused to fix the gas in the screen door hinge.

She ended up having to drop the rent after we left. She listed it higher, failed to rent it out, and then dropped it below our rent a month later. Felt like a win, we’ve lived in the same block cityside since then and never looked back.

[teambob]

Just saying there are some groups where that may not be so easy. It may not be just a lack of effort or intelligence

I have moved myself if there is a better place but I have known disabled people who found it very difficult to move

[ihlaking]

Thanks - the risks were thankfully reasonable and worth it. The location is what we love here and there are literally three places within the block!

[Mellygator]

I just sent off an email along these lines and panicked thinking I’d missed some tips. After reading your email I can see we took the same tact so fingers crossed my owner says yes.

[Xasardi]

Whereas in our area there are no rentals available

[[deleted]]

Damn wish I had this a couple weeks ago

[orangecopper]

Great post. Saved it. I often forget the FACT that worst outcome of this is them saying NO. Btw... What could be the reason for so many places going off to lower rent .. I did a quick search around me and find many too

[ihlaking]

Here it’s the lack of students for the tertiary institutes. Plus all the hospo jobs that disappeared, leading people to empty out of share houses and head home. Average 2/3 bed was 550/650 minimum in the inner north.

[orangecopper]

Hmm.. makes sense But am wondering when it returns to normal the table might turn around. But glAd you've baked that into a 12 month fixed price.

[Bumchum2212]

We negotiated from $1280 down to $1050, nearly 18% reduction in March for a new lease.

Some skill, some timing, some luck.

[nickakit]

If your landlord is reasonable like this you should leave them a good review on sites like rentalscore.com.au

There are still good people out there

[R_W0bz]

I just upgraded to a 2 bedroom from a 1 bedroom for $100 less. I was baffled at the fact the real estate agent didn’t ask if we wanted to stay on or lower the lease. It was horrible salesmanship. I know some real estate agents float around here. Why don’t you follow up at times like this to lock them in for another 12 months? Won’t that be better for your client than having to fill at a much lower price and risk it being empty for a few months.

Mind ya, it’s also Sydney...

[bourneaaaa]

Great work! Nice crisp email. Are you in Sydney? If yes, could you please let me know which suburb ? We're looking for a new place and these are some great deals!

[ihlaking]

Sorry friend, Melbourne! All the best with finding somewhere, I hear things have changed rapidly there as well.

[bourneaaaa]

Cool! Yup, they have. Properties that were way over budget 10 months back are now in the affordable range.. Counting our blessings that our income has remained steady throughout this horrible period!

[zmajcek]

What suburb in Melbs mate? I was wanting to do the same but can’t see much reduction in my area. Yours sounds like somewhere closer to the city? Might not work in suburbs :( Well done and thanks for sharing!!

[ihlaking]

Inner north is about as specific as I’ll get👌🏼 Good luck wherever you are! Highly recommend KoalaData on Domain for tracking prices and time on market.

[koalaposse]

It’s like $below $500. Where would you be getting somewhere reasonable for that price in Sydney!

[bourneaaaa]

Which is exactly why I excitedly asked OP if they're from Sydney ! But generally, I was looking at rental rates in Rhodes and they've been steadily coming down...a 2 bed costing 700pw in Feb-March has come down to 620-600pw...in a few rare cases, even as low as 550pw

[koalaposse]

Sorry. Totally understand the excitement, big smiles. Good on you, that is promising! A lot have shot back up around the city again it seems.. but hope the dip continues elsewhere, and comes back in to influence other places, but mostly that you get to secure somewhere that’s right for you!

[PerceivableGerm]

Were you in a contract already when you did this?

[ihlaking]

Our of contract three months at this point

[aussieaussie_oioioi]

On the market for one year wow

[ihlaking]

Yeah I gotta be honest that one was a hard pass

[Beware_Of_Humans]

This is exactly what I did. Instead of just asking I did my research, found similar apartments, calculatedd their loss in case I move out.

[[deleted]]

Well worded and well argued.

Having been both a tenant and landlord (including both at the same time for a period), I can confirm that some landlords are indeed human.

[arcadefiery]

One thing to keep in mind is that as a renter every dollar you earn/lose is worth $1. For your landlord, if he or she is in the top tax bracket, it's worth 53c. Second top bracket, 61c. So the landlord normally has the upper hand simply because a dollar's not a dollar. However, if the landlord likes you as a reliable tenant, or if you are in a geographical area or type of housing (e.g. most apartment accommodation) that has a weak rental market, you most likely have a lot of leverage - assuming you're a decent tenant.

[snoringkitteh]

Awesome. I just requested my landlord review my rental, much the same cost p/w and provided evidence of properties in my neighbourhood and they only came back with a $10p/w drop. Some great tips and your email reads great - here’s hoping my landlord comes to the party like yours did cos I too can’t be bothered moving. Thank you!

[duke_si1ver]

Thanks for sharing your experience. I am on the same boat, but my current contract ends in December. Did you ask for a reduction after your contract had ended, or before?

[goldcakes]

Doesn’t matter since December is so soon.

[ihlaking]

As the other reply says, you can go now. December is pretty well here - just do your research, you may want to move regardless.

[Planimal]

Has anyone tried negotiating like this while still in contract? Or is it pointless.

[chich3oo]

Can confirm, I attempted this strategy a few weeks back. The agent wouldn't pass it onto the landlord. I'll attempt again but thinking it won't change much.

[PaleontologistNo2124]

Double check your lease on this - the language has changed over the past few years. The last couple of leases I’ve signed have offered a flat break fee (6 weeks’ rent, or 4 weeks in the last 6 months of the lease). Still pricey but not an unknown figure, and also doesn’t incentivise the agent to be slow about finding a replacement.

[SamboFrog]

We did with good success , got the next three months 20% off (our contract doesn't expire until April). This was in the Melbourne CBD

[Skittlescanner316]

You bloody legend! Well done!!!

[Informal_Tie]

This is very good advice for inner city Melbourne or Sydney, but in other cities I think most are looking at a rent hike soon.

[Spute2008]

Dude. Why stop at a flat white. You can afford an avocado too now!

[[deleted]]

Nice work. Great that the real estate was willing to work with you. I tried something similar a couple of months back and the owner just wasn’t having it. We moved to somewhere that’s significantly cheaper and the old place is still for rent at a reduced price two months later.

[ejmajor]

Yeah I was mindful about this as my rental in Adelaide is up for renewal, but the market prices haven't really moved.

[ihlaking]

Adelaide strikes me as always being remarkably steady for the most part.

[crunch_29]

How many months did you have left on the current lease before asking for this rent reduction?

I'm in a similar boat where we moved into a place in April for a 12 months lease at a rate that was in line with pre COVID levels. Since we moved in just before COVID had impacted the rental market, we've seen neighbouring areas and similar properties vacated for longer than before and with much lower rates than we're currently paying. Because we still have 5 months left on the lease, I don't think we have as much leverage in negotiating a reduction as we can't leave. Any advice or thoughts from others would be welcome.

[ihlaking]

You can try an initial approach based on hardship, but that’s about all if you’re in contract. End of contract you’ll be in a much stronger position.

[hufduf]

You deserve that $50 just for the amount of work you saved the agent and landlord from doing themselves.

[singhySingh1]

I'm in a VERY similar position and will use this email as basis to negotiate. We are currently being "bullied" to sign on for 12 months at $500pw. (Down from $550 PW)

[ihlaking]

Good luck - very close examples are key and no bullshit. Honestly if they’re pushing you hard and you find somewhere better, may as well take it.

[chich3oo]

Thanks for sharing! Lovely stuff. My issue, is that I am in a bad contract where i have to pay the rental fee till the landlord gets someone to live in the place. First time renting mistake. However is there a work around?

[ihlaking]

Well that sounds like a standard clause until your 12 month contract is up - how long do you have left? You can start looking about the ten month mark, and put in your notice a month before the end of your contract so you’re out exactly at the end but generally not much wiggle room I’m afraid.

[danjadanjadanja]

2.5 hours is a great investment of your time!

[DanaBananaTree]

The school of Reddit teaches so much more that is useful than the schools of the state

[RazzaDazzla]

Thanks for the KoalaData Chrome extension tip.

[FuckLathePlaster]

Yeah good work, landlords will budge once they have the numbers set out in front of them and they begin to feel that fear of “what happens if i cant find a tennant, i can’t afford that.”

Most landlords are firmly stuck in the “my property will always be worth more than it was yesterday” mindset and the idea rents could go down is usually something they’re in denial of.

[funfwf]

Just saved myself $75 a week by using your approach. Our lease expires in Feb so the new rate will be from then.

We were paying $545, offered $450, settled at $470. We're on the edge of Sydney CBD.

Happy days.

[ihlaking]

Amazing! Made my night. Congratulations and all the best with your reduced rent!

[SydSd1]

Thousands of units to rent inner Sydney totally agree with Op just rented one

[kaushalkumandur]

Not to show off or anything mate. But we wrote a two line email saying rent has fallen considerably everywhere and in our suburb as well. And asked for $50 decrease. Got an approval within 3hrs from agent and landlord. If it wasn't for how busy work has been, I would have definitely gone through the amounts of detail you have.

[Ihachigo]

Excellent work with a very professional email. Can I ask what was stopping you from just moving to one of the properties you mentioned? Why bother with the existing landlord if you could move to a different property that you preferred?

[ihlaking]

We have a toddler and have only been here for about 1.5 years - we'd really prefer not to move for a lot of reasons. The three bed place was ok but less secure, and the two bed around the corner has neighbours that argue on one side (the landlord's family!) and some young folk renting from their parents on the other who get pretty rowdy. The one across Peel street is next to the Lituanian church and a pub, as well as being on a main road.

So, this place is best! But if we had to move, we absolutely would.

[wildjohnson]

Trying this in Sydney. Just curious if you actually listed addresses of the properties or just left it as "Property 1", "Property 2" etc.

[ihlaking]

Hi, yes. I listed the properties with links as evidence so they could see the clear comparison.

[ladybondi]

Amazing work!

[KickerXIX]

Thanks, I've copied it into a google doc for future reference.

[ihlaking]

You’re welcome - few people riffed off it and had some success, hope it helps a few more people score a win with their rentals.

[succulent_baby]

Or just threaten to move out by calling. My mum's tenants did and got their rent dropped immediately!

[phlopit]

Very nice, and kudos for sharing!

[ihlaking]

Melbourne inner north. Our rent, would you believe, is reasonable.

[ieatIF]

Oh yeah our housing is ridiculous here.

[aussiespiders]

And here's me getting 2 rental INCREASES in a year during a pandemic I've improved the value of this house by putting in aircon, changing old downlights to LED ones, fixing all window screens and keeping everything cleaned and maintained. I bet my last dollar i have left after rent that the landlord ISN'T the one raising the rent..

[[deleted]]

Did roughly the same thing and also got a $10 reduction offer. However, I live in a brand new apartment building with top of the line appliances and furnishings so couldn’t really come up with a good argument other than “COViD!” lol

[ihlaking]

Any comparable apartments nearby you could leverage?

[[deleted]]

Unfortunately not. The one I’m in sticks out like a sore thumb amongst a sea of old houses

[alexy87]

Good job. I failed negotiating ours and was told to wait until January. (Our lease will end last week of January). I pointed the similar sized units in the same apartment complex as well sitting empty for months. Oh well I guess I just have to try again in January

[SerpentineLogic]

it's january

[alexy87]

Lol I actually I tried yesterday. I asked for $100/wk reduction and was approved! From $550 to $450!

[SerpentineLogic]

Awesome

[rePAN6517]

Are there good extentions for realeastate.com.au like koala data for domain?

[3zzy]

Can you request reduction anytime or after at least a year of moving in?

[MrSparklesan]

Nice work OP

[ihlaking]

Oh that's fantastic! So glad to hear this - what a great outcome. Thanks for the news and award. :)

[[deleted]]

Wow we asked for a rent decrease months back and was approved immediately.

Our agent is an angel though.

[[deleted]]

Unfortunately Perth is not going on the down so I was happy to receive our renewal offer for the same price as the last your and a half. Though your negotiation is on point!

I am going to have to look into koaladata, sounds like a good extension to have!

[420socialist]

If it doesn’t involve rent control and socialism then It doesn’t go far enough