6 tips to finding the best deals on rent
With rents increasing in many markets, it pays to know how to find the right spot and how to negotiate the lowest rent.
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The competition for rental homes is heating up as more Americans choose to rent instead of buy. That increase in demand is driving up rents in some markets.
Consider these eye-opening statistics: 25% of renters spend more than half of their income on rent and utilities, according to a recent report by Harvard University's Joint Center for Housing Studies. Another quarter of renters spend between 30% and 50% of income on rent and utilities. (Bing: How much of your paycheck should go toward your rent?)
"As more and more people decide to rent longer … we will face a rental market that is going to be tighter for a period of time," says Eric S. Belsky, managing director of the Joint Center for Housing Studies. Although rents fell in 2009, they began increasing last year, he says.
"We think that's just the beginning," Belsky says.
"You sort of bear it by looking for smaller places in neighborhoods where you otherwise would not have looked in. Overall, it looks like people will be paying more for whatever it is they're getting."
Potential renters will have to roll up their sleeves and do some homework before settling on a place — and they'll also have to be more savvy when negotiating rent.
Below are six tips for getting the best apartment deals.
1. Know how to work rental websites
To find a great rental, you must know how to search for one. For many, the search begins online.
It's important to know which sites will help you find what you're seeking. Looking for an apartment in a large rental community? Start with Rent.com, says Allison Atsiknoudas, CEO of Rentometer.com, which lets people analyze and compare rent prices. Set on finding a unit owned by a smaller apartment company, or maybe a condo leased by its owner? Start on Craigslist, she says. A simple Web search can yield many local sites for apartments, as well, she says.
Another option is using a search engine, such as HotPads.com, which features rental and purchase listings from 400 partners, including multiple-listing services and brokerage companies. Cazoodle.com pulls listings from nearly 10,000 websites, including newspaper classifieds, online forums and individual property-management sites.
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It's important to be persistent in a search and monitor the Web regularly for new listings. Search engines can make the search more efficient, says Govind Kabra, chief technology officer at Cazoodle.
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"You're never going to be able to go to so many websites" daily, Kabra says. "Many of them you might not even know."
2. Understand the power of word of mouth
In addition to searching online listings, tell friends and family members that you're looking for a place.
"Sometimes, you can get into a great apartment through word of mouth before it hits the market," Atsiknoudas says.
Whether you do so at a dinner party or online through Facebook, tell acquaintances what you're looking for. They may have a great lead.
3. Consider a single-family home
Bargain hunters may consider renting from accidental landlords, or single-family homeowners who are renting out their condos and houses because they're having difficulty selling them in this market, says Douglas Pope, co-founder of HotPads.
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These properties are often priced lower than other rentals, partly because they may not come with the same amenities and because these owners may be more motivated to rent out their places.
"Also, to be truthful, on the single-family side, there's a lot more opportunity for people to underprice their properties because they don't exactly know what the going rate is," Pope says.
4. Look beyond the rental listings
Not finding something what you want? Start looking at the for-sale listings, Atsiknoudas says. People typically aren't selling these days unless they have to, so they may be willing to rent out their home to you instead.
"If a house has been on the market a little too long, you can approach that owner or that Realtor to rent out the unit," Atsiknoudas says. "That might be a good way to get a good deal.
"If it's on the market and taking a long time to sell, it puts a lot of stress on the owner. You may be providing some relief to that seller or that owner."
5. Assess whether rents are fair
After finding a place you want, search comparable rentals to ensure that the rent is competitive with the rest of the market.
In its listing pages, HotPads shows how rentals compare with others in the area. Rentometer shows how a particular rent compares with others in the neighborhood.
With printouts of comparables as proof, you can negotiate with a landlord for lower rent. That said, if you're in an area with a lot of competition for rentals, understand that you may not get the price you want.
Even then, "There's always room to negotiate a little bit, as long as you're willing to let the place go," Pope says.
6. Go ahead and flaunt your good credit
If you have good credit, mention that to the landlord, Atsiknoudas says.
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"Credit makes a big difference because there aren't too many people who have great credit," she says. With so many people dealing with job losses and missing bill payments, those who have good credit really shine.
If you can present a great credit report, make that known when negotiating price.