A year into the pandemic, COVID-19 has given many industries a run for their money, and the rental market is no exception.
Statistics Canada has reported record-high population losses in Toronto, Vancouver, and Montreal, with flocks of people heading to places like the Kitchener-Waterloo-Cambridge region, Halifax, Oshawa, Kelowna, Calgary, and Saskatoon. Of course, rental markets followed. In February, Rentals.ca reported that the average rent in Canada fell 6% year-over-year in January. And the Canada Mortgage and Housing Corporation has reported that the national vacancy rate increased by 1.2% from 2019 to 2020.
If the days leading up to the first of the month come with panic attacks, negotiating your rental price could do wonders for both your mental health and chequing account. But how do you broach the topic with your landlord? And how can you be sure to successfully get a rent decrease?
I checked in with Toronto real estate duo Sarah Gheriani and Zehra Cheval for some tips.
1. Get your tenant profile in order
First up, get your paperwork together. That includes your full credit report, a letter of employment, pay stubs, and proof of punctual rental payments at your current or former unit. By doing this homework, you’re making it easy for your landlord to say yes. This is your way of backing yourself up from the get-go and proving that you’re serious about the conversation.
“Landlords really do value having all the information upfront,” says Gheriani. “It shows that you’re responsible and on the ball. And when you come in strong like that, you have the capability of showing that you know what you’re doing.”
Realize, too, that with what the past year has brought, landlords just want peace of mind that they have a tenant who is reliable. “Now more than ever, because of what’s going on in the world, it’s so important to have a tenant that you know is going to pay on time,” says Cheval.
2. Know the average rent price in your area
Whatever the real estate trends are in your province, city, neighbourhood, or even building, make yourself aware of them before you start negotiating.
Gheriani and Cheval both note the importance of zooming in and knowing the trends in your specific area. Real estate can vary block to block, even building to building. If negotiating condo rent, find out if your address is sought after. Are there five or six vacant units in your building? Are they listed for $150 less a month than yours? Know those numbers and how long the units have been empty for. Gheriani explains that downtown Toronto one-bedroom or studio apartments are currently sitting on the market for 90 to 120 days. Upsize by a bedroom or a den, though, and those spaces are being snatched up faster than fresh cookies hot from the oven.
You can find answers to these questions by speaking to professionals. If you’re seeking to negotiate your rental fee, talk to real estate agents who do business in your neck of the woods. They’ll know what’s reasonable, what’s not, and will oftentimes agree to a brief chat free of charge. As both Gheriani and Cheval explain, a good real estate agent builds their business through relationships. And they wouldn’t bat an eyelid at questions like these. “We do have that knowledge,” says Gheriani. “We’re on the ground every day and we have the pulse of the market.”
3. Be respectful and frame the request as a win-win
As the old saying goes, you’ll catch more flies with honey than vinegar. If this conversation goes well, you save money, so keep it friendly! As both Cheval and Gheriani advise, drop any arrogant attitude or I-know-I-can-get-this stance. And if the discussion gets heated at any point, avoid getting defensive. If you’re concerned about losing your cool during an in-person meeting, consider writing a letter first asking for a rent negotiation. This could prove especially useful if you’re having to negotiate rent with a property management company, since they probably have more formal processes in place anyway.
Landlords don’t really like their unit to be vacant because that's a cost to them. That’s something a tenant can use as a backpocket negotiation
The best way to go into any negotiation is to put yourself in the other party’s shoes, understand their needs and how the deal will benefit them. For example, you would do well to understand that if you were to give notice and leave, the landlord would be in a situation far worse than if you were to pay a little less in rent each month.
“Landlords don’t really like their unit to be vacant because that’s a cost to them,” says Cheval. “That’s something a tenant can use as a backpocket negotiation.” Think about it: repair costs, outsourcing showings, and lost income from the unit sitting on the market — not exactly music to a landlord’s ears.
Then there’s the case of the devil you know versus the one you don’t. When tenants already occupy the unit, landlords know when the rent is paid, how the place is maintained, and whether or not there have been noise complaints or other issues raised by neighbours. “The standing of however long they’ve been in the unit can be used to negotiate rent with that landlord,” Gheriani says. There’s no such thing as a perfect vetting process. What if you were to be replaced by a nightmare tenant? Would the headache be worth the extra $100 or $150? Probably not.
4. Scrap emotion-based arguments
At this point in COVID-19’s nasty game, most of us have a sob story or two about how the virus has affected us. While recounting a job loss, lost income, or difficulty surviving on CERB cheques might pull on the heartstrings of our friends and family, there’s a good chance that these stories will just raise red flags for your landlord.
When strictly looking at negotiation tactics, this emotion-based argument might even be used against you. Take a job loss, for example. A landlord might hear that and, understanding that you wouldn’t be an ideal candidate for a new apartment, use it to their advantage.
“If I wanted to be a not-nice landlord, I know that they can’t get another unit because they don’t have pay stubs or a job letter anymore,” says Cheval. In essence, knowing that a new landlord will just turn you down, your current landlord can put an end to the negotiation right there.
So, how can you go about negotiating lower rent even in the face of unemployment? Lead with other facts. “If it’s possible to get a decrease based on facts,” says Cheval, “such as that’s what the market is calling for, I would say that first.”
Like many, I found myself moving during lockdown. Between spritzes of sanitizer, I masked up and inspected apartment after apartment in Cuenca, Ecuador, where I’ve lived for the past two-and-a-half years. When I found “the one,” I expressed my interest and immediately went about negotiating rent. I knew the unit was listed at a pre-pandemic price, and I knew I could prove that I was an ideal tenant. In the end, the landlord decreased the monthly rent by $50 and included part of my utility fee in the price.
While my experience is no illustration of the Canadian pandemic-era market, it does serve as anecdotal evidence that when armed with the right facts, everything’s negotiable.