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If you’ve been lucky enough to grab a good Covid deal on your current apartment — like free months of rent, a reduced rent rate, or free parking — you might be out of luck on your next apartment search. As people return to cities to return to the office, and eager home buyers are locked out of an expensive housing market, rental prices have risen dramatically.
According to Redfin, an online real estate brokerage firm, the average rent rose 14.1% year over year, with some of the biggest price increases occurring in metropolitan areas like Austin, New York and Miami. .
While many managed to land exclusive Covid deals on their apartments last year when demand was low and supply was high, those deals have since become harder to come by. The real estate search engine StreetEasy found that in the third quarter of 2021, only 22.4% of Manhattan rental units had received a concession, compared to a peak of 42.8% in the first quarter of the same year.
This leaves many people wondering: if my landlord or management company ends their Covid concessions or brings my rent back to normal rates, should I try to negotiate with them or just start looking for a new apartment?
Below, Gordon Achtermann, a Virginia-based CFP at Your Best Path Financial Planning, offers three ways tenants can handle rent price increases.
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1. Know your state and local laws
Depending on the state or city you live in, there may be laws that limit the amount landlords and management companies can raise rent. There are also laws that require tenants to be notified of rent increases a certain number of days before the change takes effect.
For example, Oregon is the only state that has a statewide limit on how much landlords can raise rent year over year, which is 7% (plus inflation). However, if you live in New York, landlords can increase rent prices by any amount on market-priced apartments, but are capped on how much they can increase for rent-stabilized apartments.
You will need to research state and local laws to determine if your landlord has the right to increase your rent price. Most cities and states also have local housing authority websites, so you’ll want to check those for information.
2. Negotiate with the owner
If you’ve done your research and found that your landlord or management company is acting legally, your next step might be to negotiate rental rates directly with them.
To do this effectively, Achtermann recommends putting yourself in the landlord’s shoes: when a tenant moves out, the landlord will have to find another tenant to fill the empty space. If the house or apartment is unoccupied for a few weeks or even months, the landlord will not be able to collect rent on the empty space.
Most landlords care about cash flow, so you’ll want to negotiate a rent increase with a number that makes sense, says Achtermann.
For example, let’s say your monthly rent is $2,000 and the management company raises it to $3,000 (a whopping 50% increase). If it takes a month for the landlord to fill the apartment, he will lose one month’s rent, or $3,000. The owner effectively loses $250 per month over twelve months. As a tenant, you will then want to negotiate up to a monthly rent of $2,750, which is $250 less than the $3,000 offered.
Some landlords may also be willing to receive a few months’ rent up front, as this means they won’t have to worry about a future tenant’s continued rent payments. It’s not a small amount of money, however. That’s a big chunk of money that if you don’t have it all at once, it’s worth considering building for the future.
For this, consider a high-yield savings account that provides access to your short-term cash, while offering an above-average interest rate so your money grows faster than in traditional savings. Marcus by Goldman Sachs High Yield Online Savings has no fees and easy mobile access. It’s the easiest savings account to use when all you want to do is grow your money with no strings attached. Those looking to do all their banking in one place should consider the Ally Online Savings Account. While a good high-yield account on its own, account holders can enjoy even more benefits if they also have an Ally Interest Chequing Account.
And if you can’t negotiate the rent with your current landlord, the next time you’re looking for a new home, consider a two-year lease instead of a one-year lease for avoid the prospect of your rent. increasing after one year.
3. Seek help through rental assistance programs
Finally, you may be eligible to receive emergency financing if you have rental debt or are facing eviction depending on your income. During the pandemic, the Treasury Department launched the Emergency Rent Assistance Program (ERAP), a $46 billion program that provides state and local governments with money to help renters pay rent. rent, utilities and other rental costs.
To apply, you will need to go to your state or city’s ERAP website. Eligibility requirements vary by state, and not all states and cities are currently accepting applicants for the program.
At the end of the line
If you face a rent hike this year, know your options before you comply or leave to find another place to stay.
Tenants should research the rent pricing rules in their city and state, try to negotiate with their landlord, and see if they qualify for a rental assistance program.
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Editorial note: Any opinions, analyses, criticisms or recommendations expressed in this article are those of Select’s editorial staff alone and have not been reviewed, endorsed or otherwise endorsed by any third party.