Zillow, Rent.com, Apartment List, and other sites are reporting that rent prices are falling in most major cities over the last six months. There’s this incorrect idea out there that “rent can only go up”. But rent prices are a market like anything else. If a landlord can’t get the rent price they want, they’ll drop the price until they can find a tenant. Having a place go vacant is much more expensive than getting a little less rent.
And it looks like the market is shifting. Rent prices are dropping in big cities across the country. If you’re renting and have a lease renewal coming up, it’s probably worth looking into rent prices in your area.
One note that if you just email your landlord asking for a lower rent, they’ll almost certainly say no. In ANY negotiation, the most powerful bargaining chip is being willing to walk away. If you’re not willing to move, you’ll have to pay whatever they want. But as soon as your landlord believes they may have a vacant unit in a weakening rental market, a price drop becomes the much more attractive option. But that means you might need to follow through on the bluff and move!
Housing and transportation are the two biggest expenses for most people. If you can keep your rent price down and drive a cheap car, it can open up your budget to save, invest, and build wealth!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Jeremy
