By Marilyn Kennedy Melia, CTW Features
These days, homeowners and renters face the same problem: a shortage of available, affordable places to buy or lease.
The only answer, for both groups, is to stay put.
“Over the last 12 months, renters with expiring leases chose to renew about 58 percent of the time – which is the highest we’ve ever seen,” reports Jay Parsons, vice president and head of economics for RealPage, a real estate data analytics firm.
Although they may want a bigger or otherwise better apartment, renters are often rewarded for remaining.
“Most property managers typically offer a more favorable rate for a renewing resident in good standing,” Parsons explains. That’s because a new tenant moving in entails “turn costs” like new paint or carpet. Plus, there’s always a risk that a new tenant won’t pay reliably or act responsibly.
- Early renewal could up savings.
Sometimes, local laws mandate that renewal offers must be presented a certain amount of days before the current lease expires. But if a renter knows he’ll be renewing, telling the landlord early and asking for a discount might yield some more savings. It all depends on the vacancies and management policies, “but it never hurts to ask,” says Parsons.
- Unusual lease length can shave costs.
Property managers will usually offer better terms for a lease that expires when demand from new tenants is expected to be strong. A non-traditional term, like 15 months, that expires during a busy moving period, like May, instead of a 12-month lease ending in February. Tenants looking to save should also talk about renewing their lease for a time period that’s advantageous to his landlord.
- Don’t expect to haggle.
The property manager of a mid-size or large apartment complex may offer favorable rates for renewing tenants, as well as for off-season lease expirations and early renewals, but fair housing laws require that all offers are equitable, note Parsons. That means rates are determines by how the calculations for overall building vacancies, and new rental demand relate to a particular renewal offer.
“Only some ‘Mom and Pop’ housing providers are willing to take on the fair housing compliance risk that comes with negotiating rent,” concludes Parsons.