Welcome to Saving Money with Andrew! If you’re new, you might want to check out my top 9 money-saving tips.
Little did I know three months ago, when writing a series on lease renewals (part 1 and part 2), that we would be in one of the strangest times in history to renew an apartment lease. In our city, many apartment buildings are quiet, with wealthy residents decamping to vacation homes and rentals and many others moving in with family, leaving vacant apartments behind. The NYTimes has a great article that uses location data to show how many affluent NYC residents have left the city.
Roughly half of our building is empty, with listed vacancies at the highest level I’ve ever seen. A brief look at listing sites shows similar trends, and it’s not surprising. We seem to be in the early stages of an exodus from dense urban areas, and the normal flow of newcomers has slowed to a trickle. Maybe it’s temporary, maybe it’s not.
So, what can you do if you lease an apartment in a hard-hit city, particularly if you have a renewal coming up in the next few months?
First, think about your work situation. Do you work remotely? Will your employer consider allowing you to work remotely long-term, like Twitter and much of big tech? Do you have a freelance job that provides a lot of geographic flexibility? Even if your employer ultimately intends to reopen your office, it is increasingly likely that many employers will allow flexible work schedules and have many employees only in the office 1-2 days per week for a long time. This may allow you to think more broadly about geographic alternatives to your current place.
Next, keep an eye on the market. Of course, keep track of asking rents for new listings in your building, but also track comparable buildings nearby. If you can, talk to friends/acquaintances who have renewed in the neighborhood to get a sense of how things are moving. In many cases, listed rents may be unchanged, but buildings may be offering free months on new leases (many were doing this pre-COVID also). It is relatively rare for a building to provide a free rent on a renewal, but you can always ask.
Assess your backup options. Many people we know are living with family nearby, and can do so indefinitely. If you are in that group, you have significantly more leverage with a landlord in a lease negotiation because you could simply vacate your apartment at the end of your term. You may also want to start gradually de-cluttering your current apartment to better position yourself for a move.
When you get closer to your renewal, it’s time to start really working on maximizing your leverage to secure the best possible deal. I strongly suggest reading my previous two posts (part 1 and part 2) on lease renewals. But I’d also add a few COVID-specific tips:
If it’s accurate, explain any change in your financial circumstances to a landlord. Some landlords are sympathetic and are willing to help out. Other (most) landlords don’t really care, but this can help increase your negotiating leverage by convincingly signaling that you cannot accept a rent hike (or even the same rent). This is good advice even if your lease is nowhere near expiration - many landlords are allowing tenants to defer rent payments, and in some cases providing concessions.
Understand that although your landlord has a lot of negotiating power - no one wants to move in a pandemic - your negotiating position is likely stronger. The landlord is probably coping with a lot of vacancies already and it is extremely difficult or impossible to show apartments right now. So although a landlord may try to ask you for a rent increase on renewal, it’s likely bluster and they would most likely be totally happy with a rollover or (maybe) even a rent cut.
I hope this has been helpful. If you liked it, please share it with a friend! Also, please send me your feedback, requests, and success stories.