You might not be able to find a new apartment if you were lucky enough to get a Covid deal on your current apartment. The rise in rent prices can be attributed to the fact that people are moving back into cities for work, and that wishful home buyers are being priced out of an expensive housing market.
According to Redfin, a real estate brokerage, the average rent increased 14.1% last year, with much of the increase taking place in metropolitan areas including Austin, New York City, and Miami.
According to CNBC, Covid deals, which were easier to find last year when supply was high and demand were low, have become more difficult to come by in recent months. According to the real estate search engine StreetEasy, only 22.4% of Manhattan’s rental units received a concession during the third quarter of 2021, a significant drop from 42.8% during the first quarter that year.
Nonetheless, many people wonder: Should I negotiate with my landlord or management company if they are ending their Covid concessions or set out to look for a new home.
Here are three ways tenants can deal with rent price increases, according to the suggestions of Gordon Achtermann, a CFP at Your Best Path Financial Planning.
1. Become Familiar with Local and State Laws
You may find that your state or city has laws that limit how much a landlord or management company can increase rent. Additionally, tenants are required by law to be informed of rent increases ahead of time.
Oregon, for example, is the only state that limits landlords’ rent increases to 7% (plus inflation) per year. If you live in New York City, landlords can raise rent prices as much as they want on market-rate apartments, but they have a limit on how much they can increase rent on rent-stabilized apartments.
To determine if your landlord can raise your rental rates, you’ll need to research state and local laws. You can also find information on local housing authority websites in most cities and states.
2. Talk to Your Landlord
Your next step could be to negotiate directly with your landlord or management company if you’ve done your research and found that their actions are legal.
As an effective way to do so, Achtermann recommends putting yourself in the landlord’s shoes: After a tenant moves out, the landlord will need to find another tenant to occupy the space. Unoccupied apartments or houses won’t be able to accumulate rent if they remain vacant for a few weeks or even months.
According to Achtermann, most landlords care about cash flow, so you should negotiate a rent increase that makes sense.
Rent can also be collected upfront by some landlords to prevent the hassle of chasing down future rent payments from tenants. However, this is not a small amount of money. It’s a significant amount of money you might consider planning for in the future if you don’t have it all at once.
Next time you’re looking for a new place, if you’re having trouble negotiating rent with your landlord, consider signing a two-year lease instead of a one-year lease to avoid having your rent increase after one year.
3. Take Advantage of Rental Assistance Programs
If you have rental debt or are facing eviction, you may be eligible for emergency funding depending on your income. As a result of the pandemic, the Treasury Department launched the Emergency Rental Assistance Program (ERAP), a $46 billion program that gives money to state and local governments to help tenants with rent, utilities, and other expenses.
Your state’s or city’s ERAP website is where you can apply. States and cities have different eligibility requirements, and not all are currently accepting new applicants.
Conclusion
Knowing your options before complying or leaving for a new place is important as you can be faced with an increase in the rent this year. Try negotiating with your landlord and see if you are eligible for a rental assistance program by researching the rent price rules in your city and state too.