July 18, 2010

When I moved to Seattle in May 2006, the housing market was inflating by the day. Many apartment buildings were converting to condominiums, stranding tenants. New condos and townhomes were going up on every block. I found my apartment on Craigslist at 9:00 AM, called the landlord at 10:00 AM, and by 11:00 AM I was standing in what's now my living room writing a check for the security deposit. The landlord then withdrew the listing off Craigslist and kept answering phone calls while we did the rest of the paperwork in his office.

Seattle's housing market continued to inflate in 2007 and 2008. When I renewed my lease I accepted a small increase in those years. When the bubble burst here, thousands of underwater house and condo owners put their units on the rental market just as several large employers cut back on staff (Boeing, Microsoft) or shut down entirely (Washington Mutual). The drop in demand and jump in supply sent both rents and house prices plunging. Units that had been snapped up in hours in 2006 now linger on Craigslist for 7 days until the site mercy-kills their listings.

All this has meant two things: a flood of new information about the rental market and an opportunity to lower my rent. In 2009 and in this year I used the steps below to negotiate my rent down. I'm paying less for rent now than I was in 2006 — and less even than I did when I lived in Pittsburgh.

Step 1: Set up a search. Go to your city's Craigslist site. Click "apts/housing for rent." Search for your building's name, address, or intersection — anything that will yield results from your own building.

Step 2: Subscribe. If your search returned any results, you'll see an orange "RSS" link in the lower-right corner of the results page. Click on this, and you'll see options to subscribe to a real-time feed of search results. I use Safari on my MacBook, but RSS readers are built in to Firefox and Internet Explorer on Windows as well. There are also web-based RSS readers like Google Reader that you can access from anywhere. Sites like Feed My Inbox can even take an RSS feed and send you e-mail alerts of new listings.

Step 3: Take notes. Craigslist postings expire 7 days after they're posted but many are manually removed earlier than that. Whenever you get a hit on your feed, save or print the listing. This will help you out at negotiation time.

Step 4: Start the conversation with your landlord. Over a month before my lease expired, I called my landlord and asked if I could discuss renewing my lease. I brought a listing of my findings. I told my landlord that I had seen similar units to mine renting for less, so I wanted to have my own rent reduced to match the market rate.

Step 5: Profit! My landlord told me straight up that if I were renewing in February and not July, he could lower the rent another 10%. Real estate is cyclical: people usually prefer to move in the summer months when school is out and the weather is best. I didn't try to tempt fate by asking for a 6- or an 18-month lease to re-up in winter time. My landlord offered me $100 off my rent and I signed on the line.

Start your research early and know your market. Landlords would much rather keep you as a tenant than have their apartment go empty for a few weeks or months.