How To Lose Debt

You are not really in control with what your landlord charges you for rent.  Sad but true.  This is the one reason that most people want to own their own place. I mean, you could move out if you don’t like it, which is assuming you are not locked into a lease.  Breaking a lease can be potentially pretty expensive, especially if your rate is above market rental value at any point in time.  The true cost of breaking a lease can be as much as the full value of all payments required under the lease.

However, if a lease payment is at or below market value, most landlords will let you out of a lease, if you ask.  Some may require you to assume some risk for a month or two if the unit not is rented. But if you are in a market where rentals are popular and not readily available, you likely could move on to a less expensive rental breaking your current lease.

There are two types of landlords.  One is a large company either managing the property for an absentee landlord or the company is the landlord, and the other is a small 1 or 2 unit mom and pop type landlord.  For the most part, mom and pop type landlords are easier to negotiate with, because they have less standard rules.  In addition, the larger companies have the need to treat all renters the same, or else they could be considered discriminatory.

If you find yourself in a position of not being able to pay the then current rental charges, you should discuss it with your landlord.  Many landlords are reasonable people that are willing to help the renters until they can get back on their feet.  Now if you are constantly late on your rental payment the landlord’s flexibility might be waning. Once again, small mom and pop landlords tend to be for flexible than large companies, because they set the rules.

So one way to reduce your rent is to move to a smaller, or further away from the city, rental property.  Another possibility is to convince the landlord that the rent shouldn’t really be as high as it is, given current market conditions.  If you are a good tenant, I’m sure the landlord will listen. He or she may not be able to lower the rent, but it’s worth asking.

When I was first out of school, I rented the upper half of a two family house, where the daughter of the owner lived below.  As I was friends with the daughter’s husband, I got the place at a rental rate way below current market rates.  The landlord was happy to rent it to someone he “knew”, so he knew that the place wouldn’t get trashed.

After living there for 4 years, my landlord was pacing back and forth on my back porch one day.  When he finally got up the nerve and knocked on the door and I answered, he said, “I’m sorry Ross, but I am going to have to raise your rent”. So I responded, “Ok how much do you want the rent to be”, knowing full well that I was paying below market rate, and that I hadn’t had a rent increase in 4 years.

He looked really sad at me and said, “I’m going to have to raise it $10 a month, from $200 to $210 per month”. That is a 5% increase in 4 years, not bad, almost amazing!  Well I smiled and thought to myself, let me give you $25, but I held back my generous offer because I wanted to lose debt!!

The following year his other daughter wanted to move back in, and my friend and his daughter separated, so basically I was asked to move on.  My new rental was the same size, cost twice as much money, and was in a higher crime town.  Try to cover a 100% increase in your rent or mortgage.  It took some getting used to.

Bottom line, rental fees are negotiable.  Negotiate, or move on to a less expensive rental.