From September 2020 onwards, my rent will be dropping by 25%.
That 25% saved will be going straight into investments, or maybe spent improving a few things here and there with The Money University.
Either way, it's a pretty good saving - and has created money out of thin air for me in the months ahead.
If you rent, getting your landlord to drop your rent could be a great way to create a surplus (a gap between what you have coming in and going out).
Here's how I did it:
Have a number in mind
First things first you're going to need to find a rough number to suggest to your landlord.
There's no point going in to a negotiation hoping that THEY will give you an offer you're happy with.
It might work, but you really need to take the initiative.
By making the first move, you set the agenda.
You need to research other flats/houses in the area you live in. (I live in Zone 1 in London, so I looked at houses in the immediate area, but also similar properties out into Zones 2 and 3. I could find some places that were in the region of 25% less than my house - although they weren't that nice!)
Your number needs to be based in reality - you can't just pluck it out of nowhere.
Your landlord (or lettings agent) will probably tell you some very convenient thing like "you're currently paying just below market rate", but really, that's not what you're after.
You don't want to be paying market rate.
Paying market rate is what normal people do, and that's not what we do here!
Offer something in return
When you pitch your number to your landlord, you might need to have something up your sleeve that could sweeten the deal.
No one likes to lose money and get nothing in return.
Pay for a cleaner to regularly clean the house (keep it in good condition)
Offer to find the replacement tenants
Offer to pay rent up front
Split fees of renewal [this is what we did, splitting the admin costs charged by the estate agent with our landlord as a sign of goodwill]
Extend the contract (gives your landlord longer period of guaranteed income)
Shorten the contract (give your landlord flexibility if they're looking to sell)
If the landlord is very cold initially, deftly throwing one of these suggestions can soften things.
Be willing to walk away
It helps any negotiation if you're willing to walk away.
In my case, we truly did feel like we could get better value elsewhere, so we set our number and didn't really budge (aside from the splitting of fees).
The landlord didn't take to the offer at first, but when they could see we were happy to leave, they accepted our request.
We appreciated that, and offered to split the fees the landlord was being charged by the estate agent to extend the tenancy.
If you aren't willing to walk away then you aren't really negotiating.
If your landlord is firm and then you buckle and accept their terms, they'll be able to see that you weren't serious about your request, and it'll come across like you were just trying to sneak a bit of money off them.
This makes you look stupid and it'll damage any future attempt to negotiate.
Time it right
In my case, we sent the email to the landlord requesting a rent reduction a few days before our notice period of 2 months began.
This was early enough to not risk seeming like we were trying to "pull a fast one".
But it's late enough to put a bit of pressure on the landlord.
They'll be thinking "Damn, I don't really want to have to go through the process of finding a new tenant..."
Overall, the whole process is about striking the balance between being polite and assertive.
An example email to get things started
Now you've got to give it a go. If you don't ask you don't get.
Here's the email I sent that started things off with our landlord.
Hope you're well.
So we're on the same page, we're looking to reduce our rent come September. We feel in the current climate [lockdown] London isn't offering most of the things we pay a lot of money to be here for.
In September we're looking to knock our rent down by 25%.
We've compared this to other rent prices in the area, and this definitely seems doable. It's certainly the case when you move slightly further out.
We are considering moving further out given working from home undermines the premium we pay to live near our workplaces.
We've been good renters with you for 3 years and have always been happy to accommodate things like viewings, gas meter checks etc. As you know we love living in the area, and we'd hate to not renew because of the rent - but are willing to.
Are we able to make this work?"
This is the email I used to start the conversation with our landlord.
Good luck out there rent gang!