There’s nothing more frustrating than receiving a lease renewal with an unreasonable rent price hike. Here are the best tips tips on how to negotiate a lease renewal in NYC.
Renting in New York City can be an overwhelming ongoing process involving many moving parts, like finding the perfect apartment, understanding the lease, broker fees, security deposit and navigating a lease renewal. With around two-thirds of the city’s population being renters, it’s no surprise that understanding the ins and outs of renting an apartment in NYC is essential.
This includes making sure to look out for a few things before signing a rental lease, such as inspecting the apartment, getting all negotiations down in writing, and knowing who pays for what.
However, when initially signing a rental lease agreement, many won’t be thinking about a renewal lease since it can be a good year or more in the future. Due to this, people can get caught by surprise when it does come along with an increase in their monthly rent. So why should you negotiate your lease and is it worth the trouble?
In some cases, compromising and accepting a small percentage price hike is needed. However, in others where the rent increase results in overpaying the market prices of similar apartments or where neighbors are getting lower rent, it might be a good idea to try to negotiate if you want to stay in the same apartment for another year.
When should you negotiate your lease?
If your lease is about to end and you’re expecting a lease renewal any day now, you may wonder when it is the best time to negotiate rent. Before you go about talking to your landlord about the new offered lease, it’s important you take into account the percentage the rent has increased and if it’s aligned with the current market trend.
Keep in mind that a reasonable rent increase would be between 3%-5% under normal real estate market conditions. You can easily research market prices and trends by looking at similar listings in the area on Localize. Best of all, Localize also has area price trends for listings, so you can easily see how much other apartments are going for in the area.
In addition, you must evaluate whether it is worth staying in your apartment versus moving and paying less somewhere else. It is a good idea to also consider what moving to a cheaper apartment will entail, such as moving costs, broker fees, security deposit, and time to see if the move will be worth it for you in the end. Then consider what you would be willing to accept in terms of rent increase before going into negotiations.
Tips for rent negotiation
Negotiating your lease renewal with your landlord may seem intimidating or complicated. However, there are a few things that will make this process a lot easier for you. Here are a few tips for rent negotiation:
1. Shop around
Knowing how the proposed new rent compared to your current one and current market prices is important. If you’re trying to argue against paying a higher rent, or one as high as the proposed one, looking up similar-sized apartments for rent in the neighborhood is a good way to provide numbers to make a better case for yourself.
However, keep in mind that rent can be influenced by things such as new upgrades to the apartment and building, which increases the landlord’s costs and in turn, the proposed rent.
2. Know how to present your negotiation
The way you start and go about the negotiation with your landlord can influence whether or not they are willing to compromise. It’s always good to be respectful and polite when discussing your lease renewal and negotiating against a rent increase.
3. Know your track record
Your track record matters and can largely influence whether your landlord is willing to compromise with you. If you have a good track record of always paying rent on time and haven’t been causing issues, such as disturbing neighbors or damaged property, it is likely your landlord would want to keep a responsible and reliable tenant.
4. Try to extend your lease
If your rent will be raised after your one year lease is over, an option you have is asking for a longer lease when renewing. By asking for a two-year lease, you can lock in the rate and avoid having to re-negotiate again in another year.
Additionally, it can be a good incentive for your landlord as well since they won’t have to worry about finding a new tenant in case you choose not to renew your lease for another year. However, not all landlords will be open to a longer lease, but it can be a good idea to ask if you want to keep staying in your current apartment and building.
5. Be prepared if a compromise can’t be met
Negotiations on a rent increase aren’t always an easy conversation and sometimes you and your landlord won’t be able to compromise on a price. While the price of rent might be on the forefront of your mind, there are other ways you can negotiate in order to compensate for agreeing to the rent increase.
For instance, you can ask your landlord to make a replacement or repair in your apartment. This can include any necessary repairs for ongoing issues in your apartment that may not have been addressed yet. A nicer living situation and better amenities may be worth the extra rent you’ll be paying each month.
6. Talk with your neighbors
If you’re unsure about your renewal lease offer, it can be good to talk to your neighbors and see if those with similar-sized apartments were offered the same. If you find that they are receiving a lower monthly rent or special incentives for starting negotiations earlier, it can be a good way to leverage your negotiations with your landlord.
7. Take a look at the total cost
With the change in rental costs, it is essential you review and calculate the total cost of housing so you know if it’s within your budget. You can calculate your rental rate by finding the cost per square footage over the length of your contact. Keep in mind other details such as if free rent was offered for a few months and the price increase from year to year due to lease renewals. While the initial rental costs might seem low, the rent hike for each year can quickly make a space pricier than expected.
8. Know your rights
While the increase of rent during a lease renewal may be common for all renters in New York City, it is important that you know your tenants rights lease renewal. Research landlords and buildings beforehand so you know if you’ll be signing a lease on a market-rate apartment or a rent-stabilized apartment.
For instance, in unregulated apartments, tenets aren’t guaranteed a renewal lease. However, according to the Housing Stability & Tenant Protection ACT (HSTPA) of 2019, landlords are required to inform tenants if they intend to raise the rent by more than 5% and if landlords don’t intend to renew a lease. In both cases, they must give you a mandatory 30-day notice. Keep in mind that landlords of market-rate apartments are free to raise rent as much as they want.
As for rent-stabilized apartments, tenets have the basic rights under New York law to choose a lease renewal of one or two years. Additionally, landlords must give a written notice to the tenant if their right to renew between 90 and 150 days before their lease ends. They are also only allowed to increase rent by 1.5% for one year leases and 2.5% for two year leases.
Price drop rentals in NYC
If you’re looking to move to a new apartment in New York City, there are plenty of available rentals with price drops. Here are just a few apartments with lowered monthly rental prices:
- 235 East 51 Street, #2D East Midtown, New York ($2,795) – 2 beds, 1 bath
- 210 East 47 Street, #3C East Midtown, New York ($2,979) – 1 bed, 1 bath, 725 sqft
- 20 West 64 Street, #41S Upper West Side, New York ($3,950) – 1 bed, 1 bath, 710 sqft
- 175 West 12 Street, #17E West Village, New York ($4,600) – 1 bed, 1 bath
- 45 West 11 Street, #3D Greenwich Village, New York ($5,500) – 2 beds, 1 bath
With these lease renewal tips, you’ll now be better equipped for deciding if your current NYC apartment is worth the price, or if moving to a price dropped listing is a better option.
If you’re shopping around for a new space in NYC, Localize is here to help you.