"It's a renters market..." article and help with getting rent decreased

[jn_12]

http://www.yourhome.ca/homes/reales...t-s-a-renter-s-market-as-condo-building-booms

It's a renter's market as condo building booms
December 9, 2009

Tony Wong
BUSINESS REPORTER

Christina Medeiros sees the competition going up every day.

The leasing manager for Maple Leaf Quay, an apartment building on Toronto's Harbourfront, is surrounded by cranes that are building soaring new condominiums that have enticed potential tenants away from her units.

A housing boom with low interest rates has seen many renters buy their first homes. Others are renting newer condominiums.

But Medeiros isn't taking the defections lightly. This fall, she reduced rents. A two-bedroom is now $1,499. A year ago it was a $1,599. A one-bedroom is now $1,199, compared to $1,325 last year.

As well, anyone who signs a one-year lease gets a month's free rent and a chance to win a Smartcar.

"We had to be creative given the conditions," said Medeiros. "Interest rates have had a major impact on the rental market."

The movement out of rental housing saw Ontario-wide vacancy rates jump to 3.3 per cent this year from 3.1 per cent last year.

And Medeiros can expect to have even more competition in the years ahead.

There are an estimated 35,000 to 40,000 condos under construction in the Toronto area, the bulk of which will be completed in 2010 and 2011. Some will be purchased by investors to compete as rental stock.

Still, the market took a break in November, as Toronto-area housing starts declined by 25 per cent from a month earlier, according to figures released by the Canada Mortgage and Housing Corporation Monday.

The seasonally adjusted and annualized rate of housing starts hit 25,500 units last month.

"The decline came solely from the highrise sector and should be viewed as a blip in the recovery process," said Shaun Hildebrand, senior market analyst for the CMHC.

"A large backlog of highrise units are coming close to the construction stage."

Nationally, housing starts grew, with 158,500 units registered in November, up by 0.7 per cent from October.

"Canadian construction activity continues to rebound from the depths of recession and should be pulled along further by strong demand," said economist Robert Kavcic of BMO Capital Markets. "The Canadian construction industry is looking like a source of strength in the coming year."

My girlfriend and I live in the apartment building described in the first half of this article from today's Star (the italicized part). We've been living here since March 07, and after the first year we were on a month to month lease. We've been reluctant to sign a one year lease because of job uncertainty (I've been in grad school, she works in TV). When we moved into our one bedroom, we were paying 1250/month and with annual increases we are now up to 1300/month. In the article, the manager of our building admits that it's tough to attract renters to the building, so much so that they're now giving one month free and starting tenants at 1199/month, plus they get entered in a draw to win a smart car. We've been ideal tenants (in a building where turnover is high and missed rent notices can be seen on quite a few doors every month) but we're concerned that our rent will go up again in March, at which point we'll be paying $125 more than a new tenant (plus the new tenant will have saved an additional $100/month from getting one month free, so it's a $225 difference).

What we are wondering is how we can potentially go about using this information against our building to get our rent lowered? How would you go about it? Obviously signing a year long lease would be a start, but how should we negotiate?

Any help would be appreciated. Thanks.

 

[UrbanVigor]

Certainly making the commitment with a one year lease will help with negotiations though I would start with just a discussion of current market rates. However, regardless as to how the negotiations take place, should you move to a new apartment you will get the savings you wanted, but will have to sign a one year lease nevertheless. So do make it an expectation.

I think it's perfectly fine to politely explain your situation and what the current market yields. You do have leverage in that vacancy rates have increased and they'd increase higher in your current building should you leave.

If you aren't successful in getting a reduction in rent, it's no loss to you. No one can look down upon you for rationally making the argument. Then you still have the flexibility to move and attain the reduction you're seeking.

 

[Dan]

Just have a truthful discussion with the landlord, and see if they will consider a lower rent to keep a good tenant.

But to really have good bargaining leverage, you should be aware of a comparable unit that you like, and be willing to move if your landlord won't be able to lower your rent.

You might find when you start comparing that you still have a fair rent in this market place. A comprimise might be possible.

 

[TrickyRicky]

Negotiating 101:

-Just ask but don't use demanding language

-When the landlord says no, look disappointed or pained.

-When speaking to the landlord don't say that this is what you want, use your girlfriend as the scape-goat (you like it here but she wants to move if you can't get a deal, you are happy here but she is constantly bitching about moving closer to work etc.). Don't let the landlord force you into making a decision on the spot. Tell him/her your girlfriend makes all the decisions so you will have to ask her first. This is called the "appeal to higher authority" and "good guy/bad guy" gambit.

Come up with an incidental concession to your landlord beforehand that you don't really care about anyways. This could be signing a one-year lease when you planned to move out anyways or something else

Have options, the person with the most options can exact the most concessions. Actually spend a few hours looking for a new place first to find out what your options are first, even if you have no intention of moving.

 

[cdr108]

- go and do a quick search to see what's around for comparables;
- talk to the property manager and discuss that you've been good LT tenants, and are seeking a reducution of rent as current markets have warranted;
- mention the article where the PM states rents have been reduced, and the number of vacancies/missed rent notices;
- be aware that you may be required to sign a 1-year lease.

 

[TrickyRicky]

Negotiating 101:

-Just ask but don't use demanding language

-When the landlord says no, look disappointed or pained.

-When speaking to the landlord don't say that this is what you want, use your girlfriend as the scape-goat (you like it here but she wants to move if you can't get a deal, you are happy here but she is constantly bitching about moving closer to work etc.). Don't let the landlord force you into making a decision on the spot. Tell him/her your girlfriend makes all the decisions so you will have to ask her first. This is called the "appeal to higher authority" and "good guy/bad guy" gambit.

Come up with an incidental concession to your landlord beforehand that you don't really care about anyways. This could for example be signing a one-year lease when you weren't planning to move out anyways .

Have options, the person with the most options can exact the most concessions. Actually spend a few hours looking for a new place first to find out what your options are first, even if you have no intention of moving.

 

[jn_12]

Thanks all.

I think we're okay with signing a year-long lease if it means we can save some money. I think we'd be staying here for the year anyways, so it wouldn't make a difference to us if we were in a lease or not.

I've looked around to see what else is out there and it's certainly not hard to find one bedrooms for less. So I think we'd be in a decent bargaining position.

If anyone else has any input I'd be glad to hear it.
Thanks.

 

[eloodi95]

Another approach might be to ask the landlord for an updgrade - e.g. replacing carpet with laminate, replacing some old appliances, adding a closet organizer - while maintaining the same rent. That way you're rewarded with a nicer unit (in consideration of a more competitive market) and the owner has kept a tenant while increasing the value of his suite. A real win-win.