How to negotiate with real estate agents and landlords to get the best deal on rent

It may come as a surprise to tenants that rents aren’t set in stone and are open to negotiation.

Market rent is based on competition for local rental properties, the range of amenities on offer and the popularity of a neighbourhood, and these factors can change.

In cities where there aren’t enough properties available for the number of people looking, this can pose a problem for tenants because it gives landlords a reason to hike up their rent.

But it doesn’t mean you can’t negotiate, and a little research and some confidence can go a long way.

You have the right to ask for a better deal

Agents are used to negotiation and expect you to ask questions. If you have a good track record of renting and can supply references, there’s no reason to be timid about striking the right price.

Advocacy and research officer at the New South Wales Tenants’ Union, Leo Patterson Ross says you’re within your rights to ask for cheaper rent because the premise of the rental market involves two parties agreeing on the arrangement.

“The landlord generally holds the power but there are times and situations where you can absolutely ask for lower rent,” he said. “For example, if you can put forward a credible argument that there isn’t a lot of competition [for the property], you can show you’re the best option.”

Mr Ross says it’s harder to do this in Sydney but it happens more regularly in other cities where more units sit empty.

In areas with high vacancy rates, tenants have the upper hand when negotiating. Photo: Peter Braig

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President of the Real Estate Institute of Australia, Malcolm Gunning counts the Brisbane suburbs of Teneriffe, Newstead and Fortitude Valley among those where the supply of units outweighs demand.

“They’re good areas with a lot of apartments and the tenant has the upper hand in those places,” he said. “It’s very much about understanding supply and demand, which can give you some indication of how much leverage you have to negotiate the rent.

“Gauge how many properties are on the market in your price bracket. Then the moment you realise there’s a few, you’re in a position to negotiate.”

Study your local market

If it’s quiet where you’re looking, you have nothing to lose in suggesting a cheaper rent, be it $10 or $20 off the weekly amount.

Compare similar properties to help you determine how much of a discount to ask for. What’s the typical asking rent? Are there variables based on the location or perhaps extra parking or storage space?

Vacancy rates indicate the level of vacant properties in an area as the percentage of the total properties available. These figures are typically available on the website of your state’s real estate institute, and can be used to back up your argument.

Keep an eye on the typical asking rent of the local market. Photo: Photo: Jim Rice

More broadly, understanding your immediate competition can be helpful in choosing where to rent. For example, if you’re looking close to a university campus the competition will be strong and haggling will be more difficult. In this case, you might need to look one suburb over.  

Similarly, if you’re looking for a place over the Christmas or Easter break, the competition is likely to have eased and you might find an agent who is willing to negotiate.

How to ask for a better deal

At the end of the day, asking for lower rent is about selling the idea. If you believe the facts are on your side, then explain them clearly in a letter or email.

Ross says to bring up a rental reduction as part of the application. He says you don’t need a long explanation as the landlord will already know if they’re in a weaker position to negotiate.

“You simply say that you’re interested in the place but that you think the rent should come down,” Mr Ross said. “There’s no easy formula but don’t only take into account the number of bedrooms or size of the place, consider its age or quality as well. Those types of comparisons are absolutely relevant.” 

Gunning also suggests being ready with a brief property resume that outlines your experience as a renter and why you’re a good tenant.

“Be prepared – take a resume to give to the agent,” he says. “Just one page that shows where you’ve been and what you’ve done. This goes a long way with the agent and the landlord.”

Remember, if you have a good track record of renting and can supply references, there’s no reason to be timid about striking the right price on your next home.