One woman's success story
Phyllis Nichols, who rents a two-bedroom, two-bath condo with her husband in downtown Columbus, Ohio, found out firsthand how much power renters now wield."We were in month 10 or 11 of an 18-month lease with an option to purchase," Nichols says. "The owners sent around an e-mail saying, 'Do you guys think you might be exercising the option?'"
Looking at the price they'd negotiated a year earlier for the 2,000-square-foot condo made them realize they didn't want to buy into the topsy-turvy real estate market.
"So we decided that we weren't comfortable making a purchase because things seemed really uncertain," Nichols says. "But if we're going to continue leasing, we should probably see what's out there."
Nichols spent a few hours researching local apartments on the Internet, first on Craigslist and then on Metro-Rentals.com, a Web site focusing on urban properties in Ohio. Soon, a pattern emerged.
"We realized that we could get a similar space with similar amenities for about $600 a month less," she says.
Even though they were in the middle of their lease, Nichols took her case to the company that managed her property.
“I just told (the manager) kind of flat out, 'If we move out, I think you would have difficulty leasing it at this price.'”
"We literally just called up the company that we lease from and said, 'We're not necessarily looking to move, but the market has changed dramatically since we originally entered into our agreement, and we'd really like to talk to you about it, because otherwise we probably don't see ourselves staying here,'" she says.
Nichols asked the company to cut $600 a month off the rent. The company countered with a $400 per month concession and a better set of parking spaces. Nichols happily agreed.
Nichols' case suggests that even if renters are still working with an existing lease, falling rents and increased vacancy rates give them leverage to ask for a better deal from their current landlord.
"I just told (the manager) kind of flat out, 'If we move out, I think you would have difficulty leasing it at this price,'" Nichols says. "'I think you'd even have difficulty leasing it maybe even at the $600 off that I'm asking you for, just because so much is on the market.'"
The downside
That kind of talk annoys Lisa Trosien, especially when it comes to leases already signed by tenants."Are they going in and renegotiating their car payment?" says Trosien, owner of ApartmentExpert.com, a multifamily consulting firm based in Chicago. "Why would you just pick your housing payment?"
But Trosien acknowledges that renters have the upper hand in today's market.