Raise your hand if you rent your house or apartment! If you do, you’re not alone. According to a Pew Research Study, in 2019 36% of Americans rented their homes. 

Renting is a great housing option for many people. It can allow flexibility if you aren’t sure how long you’re staying in an area. It can also reduce upkeep and maintenance costs because your landlord will take care of most of these. And it offers people who’re just starting out or live in a high-cost-of-living area access to their own space without the required down payment that goes with buying property. 

One thing renters usually aren’t excited about though is renewing their lease and facing an increase in monthly rent. If you’re getting ready to renew your lease, it can be stressful and scary to face those increases and not know what will happen to your monthly budget. But there is some good news! 

It’s possible to negotiate your lease and adjust your budget in other areas to make a rent increase work for you. 

Let’s look at how to negotiate your lease and adjust your budget when your rent goes up to get you prepared.

Know Your Numbers

The first thing to do if you’re worried about facing a rent increase is get to know your numbers. To do this, there are three steps you should take.

Step 1: Understand Your Budget

Look at your spending and income for the past three to six months and develop a spending plan based on how you see money flow into and out of your accounts. 

Take into consideration your fixed, flexible, and non-monthly spending to get an accurate picture of what is going on. And be sure to consider all income sources that are available to you for covering your monthly expenses. 

This can include income you earn, income earned by a partner or others in your household, benefits you receive, child support, and any other money that comes in each month.

Step 2: Factor In a Potential Rent Increase to See How it Fits

Once you have a clear picture of how money is currently flowing in and out of your account, it’s time to see how a rent increase might affect your bottom line. Add the rent increase into your monthly spending plan and see if you have enough money to cover it.

Step 3: Find Ways to Cut Back on Other Expenses

You might find in step two that an increase in rent isn’t currently feasible based on your spending. 

If this is the case, look at your flexible and non-monthly expenses to see if there is any spending you could cut back on or cut out entirely to help cover rent. 

One good place to start is to review all the subscriptions you have to ensure you use them. If you don’t, cancel the subscription and put the money towards rent instead. 

Other spending categories people often adjust when rent goes up are eating out and entertainment. But any category you have control over that you can reduce or eliminate can be helpful to consider. 

Understand the Rental Market in Your Area

Once you’ve looked at your budget to consider how an increase in rent may fit in, you may still want to negotiate your lease. If you want to negotiate with your landlord, the best place to start is by making sure you understand the rental market in your area. This will help you know if the rent you’re paying is common for your area or if it is high. 

Look online for local apartments similar to the one you’re currently renting. Note the cost of rent for those similar apartments. If you find some that are less expensive than yours, make a list. 

This is a good starting point for negotiating with your landlord. It can also serve as a list of options for you if you can’t get the rent on your current apartment down to a price that fits in your budget. Be sure as you build your list that you’re comparing similar apartments with similar amenities. 

Time Your Negotiation Correctly

You don’t want to wait until your lease is already up to start negotiating. This doesn’t give you enough time to frame a good negotiation, and it doesn’t give your landlord time to consider your offer. It can also make it more challenging for you to find a place within your budget quickly if you have to move. 

Instead, start the negotiation process a few months before your lease is up.

It can also be beneficial to negotiate towards the end of the month because your landlord will likely have a better sense of the empty units they are trying to fill. You might also consider asking your landlord during a less busy time of year. Most landlords are very busy in the summer, and sometimes negotiating with them during their busy time doesn’t help your case.

Consider Alternate Ways to Reduce Your Rent

Sometimes your landlord may not be open to lowering your rent based on the current terms of your lease. This doesn’t mean all hope is lost. It just means you might need to get creative to reduce your rent.

Sign a Longer Lease

If you’re on a short-term lease but know you’d like to stay in the area, you might be able to get your landlord to lower your rent if you agree to sign a longer lease. Doing so can help your landlord guarantee the unit will be rented, and they might be able to lower the rent as a result.

Ask About Credits for Referrals

If there are empty units in your building or complex, ask the landlord if you could get credits towards your rent for each qualified applicant you refer who ends up renting an apartment.

This is beneficial for your landlord because it can help them fill units and earn more. Just be sure you’re referring people you know will be good tenants.

Think About Your Skills

Another offer you could make your landlord is to trade some work for a reduction in rent. Are you good at fixing things? Good at cleaning? Can you build and maintain a website? These could be areas your landlord needs help with and in exchange for your expertise, they might be willing to reduce your rent. If you aren’t sure how you could help, ask your landlord if they need help you might be able to provide.

Put Your Request in Writing

While it’s good to set up a meeting and speak with your landlord directly, it’s also a good idea to put your request and your reasons for your request in writing. 

You can highlight your strengths as a tenant as well as the prices for similar rentals in the area, any skills you bring to the table that could be useful, and what you’re looking for from the negotiation. 

Having your request in writing ensures that you hit all the relevant points as you negotiate. It also lets your landlord reflect on what you want after the conversation is over.

Know What You Can Accept

It’s important when you’re negotiating to know what your target number is for your rent. It’s equally important to know what number you’ll accept. 

Just like any other negotiation, if you’re negotiating your lease, the conversation will likely be a give-and-take between you and your landlord. Because it’s a two-way conversation, you may have to compromise. 

To make this easier on you, it’s helpful for you to identify exactly what your ideal rent would be. And it’s necessary for you to know what level of rent you can afford and would be willing to accept.

Let’s look at an example. 

Your landlord has notified you that at the end of your lease, your rent will go up by $250 a month, but that doesn’t fit into your budget. Your goal for the negotiation may be to keep your rent where it is now. But after you’ve reviewed your budget and spending plan you know you can afford to pay $100 more than you currently are per month. If your landlord lowers your rent increase to just $100, while it wasn’t the goal, you know you can accept it. 

Knowing what you can accept will help keep you grounded as you negotiate, which is important.

Be Prepared to Walk Away

One of the final pieces of starting to negotiate your lease is knowing you might have to walk away. If you’re clear on your numbers and know what your budget can support, and ultimately, your landlord can’t or won’t negotiate with you, you’ll need to walk away and find a new apartment. 

Because you’ve already researched comparable apartments, you should have a list of places you can reach out to where the rent may better fit your budget. 

This is also why it is important to start negotiating with time still on your lease. It gives you time to make alternate arrangements and to move. 

It can be tough to walk away from an apartment. But if your new increased rent doesn’t fit in your budget and even through negotiations, you can’t get it low enough, walking away might be your only option. 

It can be stressful when you’re faced with a rent increase. You may not know what to do or how to be sure your budget can handle the hike. And if it can’t you may struggle for what to do next. 

That’s why it is important to know you can adjust your budget and negotiate your lease to find a solution that will work for you. 

If you decide to negotiate with your landlord, start before your lease is up and research the rental market in your area. Remember, it’s a conversation, not a confrontation. Always be polite. And if possible, be willing to compromise. 

If you and your landlord negotiate successfully, be sure to get any agreement in writing. 

Negotiating your lease can be intimidating. But if you do your research and know your situation you can start the process with confidence!