Negotiating rent reduction

I am looking to request rent reduction from my owner and request some tips.

I live in the Hills district of Sydney in a townhouse that is 300m from the Cherrybrook tech high School. The owner has raised the rent from $640 pw in 2014 to $660 in 2016 to $680 currently.

Thankfully my wife working in a childcare on an hourly basis has kept most of her hours, and I have kept my full time job. I would like to request rent reduction as the economic conditions are not the best and the rental market overall is slowing. Appreciate any tips on rent negotiation. Thanks.

 

What are similar properties in the area renting for?

 

Do you think the owner of the property is immune to the economic conditions not being the best?

 

How much reduction are you planning to ask for? Not a lot of stock for rent according to domain.

 

If you still working and have keep your wage the same.
You can ask for rent reduction, but don't count on it - be prepare to move if you get declined.
IMO - No landlord will reduce your rent if you can't show proof you have been affected.

 

Be smart about it, request a rent reduction if it has genuinely affected your circumstances.
If it hasn't and you think you are paying above market rent, then collate some rental evidence as your proof and frame your argument around the 'excessive rent'.

No need to bring COVID if it has nothing to do with you, all it makes you is a whinger and an opportunist.

Also, saving $20-30 bucks a week might be good, but if you get declined you show your cards and have to be prepared to move out.. last I checked moving costs are not cheap.. all for a maccas lunch and a cup of coffee..

 

I've recently been through this myself. I was not seeking relief due covid / hardship and I assume you are not either.
Here are some pointers...

1. Write a proper letter and include plenty of recent commentary around rental vacancies and price declines. Include references for these articles. Google is your friend.

2. Include comparable properties in your suburb and surrounding ones. By comparable I mean bedrooms/parking... not flashiness. Ideally the cheapest similar specs property not ones that 'appear just as nice'. Dont include a link to the property, just include the specs, address, and letting agent contact details.

3. Offer below what you actually consider fair and come up if need be.

4. Be prepared to terminate your lease (assuming its periodic or due to expire)

5. I dont know your circumstances but moving doesnt have to be expensive if you have the time to do the small stuff yourself. My last move cost $210 total to move within my suburb. It's a hassle, but I had the time spare anyway.

Remeber it's probably more expensive for the landlord if you walk. They have to pay a reletting fee, cost in a vacant period, chance a new tenant, and then meet the market rent anyway.

In my scenario the property manager declined the rent reduction on the basis that despite vacancies rising, prices were not falling (central Sydney) I terminated the lease and the property re-let for 20% less which is what I was offering in the first place.

$30 a week might not sound like much initially, but is over $1500 a year, and depending on your tax bracket you need to earn $3000 a year to cover it. How would you like a 3k payrise now?

PMs and landlords rely on the fact you will put the move in the too hard basket and pay up. Whether you do too is upto you.

 

Yeah, include examples of other rentals that are cheaper and be prepared to move out.

Some landlords may see your demand as a sign of future dealing and decide to move on to a different tenant.

Just make sure you ask for rent reduction that is worth the trouble

 

Seems in line with other townhouses in the area. Unless you're right on New Line Road, in which case it might be a little high.

 

is the tenancy agreement up?

if not - your hours and pay is not affected and now you want a rental deduction?

whilst i feel for those truly affected, it is also unfortunate some are taking advantage of this covid situation to save a few bucks so i hope you don't fit in that boat

 

I dont think the OP is seeking hardship, says he/she wants rent to negotiate rent that reflects current market rates - which in general are declining.

 

then equally when the rental market gets more expensive, should the landlord be negotiating to increase the rent midway through the lease too in order to reflect market rates ?

 

Well, they could ask to do that if they wanted to but in both cases you risk damaging the relationship between the tenant and the vendor.

 

I'm not sure what you are getting at. Nobody has said anything about being midway through a lease as that info has not been given.

My response even refers to the assumption the OP is on a periodic or soon to be expiring fixed lease in which case they are rightfully entitled to negotiate a new rate.

 

Looks like $680 in about right from what I could Google right now.
$10-$20 on either side of things.
Not worth the ink to paper and cause a wave.

 

Thanks all for some pointers and considerations. I can clarify a few things:

- My wife’s work is a bit dodgy as hours may reduce once the Job Keeper is terminated (the business owner has given hints to that effect). So that is a risk

- Rentals are sitting on the market for a while, and RE.com and Domain don’t always have the complete picture.

- Anecdotally my friends have been able to negotiate a lower rent.

- My lease comes up for renewal in August so I was timing to discuss rent reduction with that

- Like I have mentioned, in the past years the owner has increased $20 every 2 years and we have paid without pushing back. The market deteriorating is a catalyst to negotiate.

- Irrespective of what the crappy inflation numbers say, the cost of living is always climbing higher for daily necessities including toilet paper, milk, bread etc. so it would help to reduce costs where I can. So some may view this as opportunistic but it is a reality of a middle class person with a family.

Worst case is the owner may want an rent increase which either I suck up and pay or move out (less likely as wife is not too keen).

 

Your worst case is the owner just decides not to renew. Your best case is they agree to your proposed decrease.

Calling your mobile, utilities, and insurance providers might save you more, at less risk.

 

What Wylie says above. I dont know anything of the area you mention but having just gone through the lease expiry - move - new lease process the biggest observation I made was that most landlords genuinely dont believe rents are falling.

When I was going through it a few months ago there were a surprising number of rental listings 'available now' (vs avaliable on X date) which suggested to me a reluctance to meet the market and hence a languishing vacant property.

Either way you have nothing to lose from putting foward a sensible request if you believe it is warranted in your area.
Wost case is you are told too bad, no reduction will be offered.

 

I've increased rents for two of my properties and haven't had any issues getting new tenants. So I agree.

As long as it's reasonable, I agree. However if I was the landlord and the tenant asked me for a $100+ reduction without a loss of income, I might well tell them to take a hike, rather than keeping a tenant that looks like they'll be trouble.