Quick point to add on this: many of the massive residential buildings that have recently been constructed in downtown/prime areas over the past few years initially supplemented their cash flow by AirBnBing their excess stock out as they built up towards 90%+ traditional occupancy. None of these corporate landlords have that as a safety valve anymore to the extent they used to. They may be in denial right now, but they are fucked.
Don’t even respond to that insult offer with any questions for justification.
Tell them you are giving your 60 day notice and moving out unless they reduce rent 20%.
That’s your offer. Take it or leave it. And be ready to move out.
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Residential landlords will be fine. At worst they breakeven.
The shopping mall owners and office landlords will get fucked.
I would hate to own commercial office property in areas where most tenants were tech companies, customer service, etc - stuff that’s easily shifted to WFH. Even once things are back to normal, a lot of those tenants are just never coming back because WFH will be popular.
I would change the first paragraph.
Its feels to weak.
I would say something along the lines of "as a financially stable tenant I have a lot of options and I refuse your rent increase. I have visited many vacant apartments and noticed prices are going down everywhere rent wise. Landlords are offering free months of rent for me to move in at this price range.
Unless you offer a rent reduction I am moving out to a comparable apartment at lower price.
Remove “times are tough”. Times are not tough for you ever, never admit that.
Input your 2nd paragraph offer"
50% rent reduction will probably get them to say eff off get out, but eh who cares.
I haven’t read the book you’re talking about, but this language seems utterly pointless.
Why would the rental company care about your ability to pay or whether times are tough for you or others? You either are or aren’t willing to take their offer - your particular reasons don’t matter to them. If they have a good backup (good BATNA), they’ll let you walk. If they don’t, they’ll bargain with you. You suspect they don’t have a good backup option, and maybe you’re right. But a brief, “I have enjoyed living here, but your proposed rent is unacceptable. I would sign a new 12-month contract for $1,400 [or whatever].” seems to me like it would serve the same purpose.
My accountant is in a large firm and pays 20k per month in rent. Its empty right now.
His law firm friends were paying 40k in rent per month and they are at 10% office capacity.
When that lease comes due he is not renewing. How many other tenants in services are thinking the exact same thing right now?
So many restaurants and retail are getting corona fucked and still can’t operate at full capacity. Good luck finding a replacement tenant.
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Keep in mind this is a process, we’re likely to go back and forth. The goal in the first round is to build up some rapport, hence the “times are tough” sort of like, “Hey, we’re in this together.”
I don’t think hitting them with threats of moving right away is the right approach. I can always just drop off my notice in a week or two, then let them scramble at that point if they are so inclined.
They care about keeping apartments full, and the whole concept is that this phrasing gets them to try to solve my problem for me so that they feel in control.
Let’s not pretend their offer was actually a good/realistic offer. It’s an anchor. Like the rental market is a mess, occupancy is down everywhere, everyone is running deals. There’s no way in hell they think they should be getting a 38% increase. My reasons are framing the next step of the negotiation.
“How am I supposed to pay that?” doesn’t mean like physically how am I supposed to find the money. It means, how am I supposed to pay you $3,880 when I can go like four blocks that way and get $2,300?
It’s a more polite way of saying, “Fuuuuuuuuuuuck no, are you high?” and leaving the ball in their court to address the problem with their offer.
Yeah, there’s no way they have a good BATNA. They may think they do, which is the main challenge here. Like I assume they think the worst is behind us in the pandemic, everything’s going to bounce back by the end of the year, etc, and they can let me walk and they’ll fill it at $3,300 in a few months or something. Although they still lose out in that scenario, so who knows?
This presentation is a lot more adversarial and accusatory. It’s more likely to put them on the defensive when they see “unacceptable.”
Highly recommend the book, or for shorter versions what chupacabre and boredsocial wrote earlier in the thread was gold along these lines as well.
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I honestly don’t believe there are magic words that are going to help negotiate. There is no need to be nasty or confrontational, but being direct, succinct, and to the point is perfectly fine.
Lots of good advice to @anon38180840 (and some not so good advice 
) To sum up all the general comments:
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Short and sweet - agree.
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Holding back on justification points (for now, totally fine with that)
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Avoiding sending buying signals- agree
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Adversarial language - YMMV but absolutely not necessary.
I was spitballing earlier in the thread which led to some of the lines like “tighten our belts”. So appreciate everyone’s feedback on catching that.
I am curious why so many folks seem “offended” by the 38% premium. I am growing concerned that I’m being myopic as I haven’t rented an apartment in a long time. But the way I’m reading a lot of you, I’m wondering do you get offended when you get told the sticker price when you walk on a car lot? Probably stems from my experience in buying software but I can’t remember a single time when a supplier didn’t open with an absurdly high number. If I flipped the table every time that happened, no deals would get done. Again, could be my myopia, but supplier anchors are SOP, IME.
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Well, you and boredsocial make me feel super naive here, but I think that while Cuse has real leverage in a normal spot, dealing with big corporate apartment rentals is not a normal spot. You guys are relying on this being an abnormal situation because of the pandemic, but that requires both parties to believe that. It could play out like Riverman offering to buy the house, the sellers foolishly thinking they had leverage and refusing but then returning later out of desperation.
Awful poker analogy: If a run a perfect bluff to make my hand look like a medium strength hand going for value by making say, a smaller river bet, it doesn’t mean squat if my opponent doesn’t know that and just prefers to call small bets.
It’s possible–probable–I am just not aggressive enough in spots like this. But I wouldn’t expect an offer better than keep the rent same as it is including free parking. Maybe you can get a free month like new renters often do. Honestly, I would just tell them I’m moving and plan on doing that.
Unfortunately, I’ve found that these situations almost require you to move. New parties want you more than old parties want to keep you. It’s like being a post-prime professional athlete.
This is great feedback. The poker analogy is good, but our negotiation has multiple streets to extend the analogy. If this was BAFO point, I’m inclined to agree that we have to think through the bluff, but this is preflop. We have additional streets to extract value.
And I agree that we are leveraging abnormal times. Two thoughts on your points 1) It is our job to educate the supplier on the “why” behind our objections and 2) Corporate landlord really should understand that they are “way behind” in this hand. But even if they don’t, they’ll still counter. If it goes down to 30% (let’s say), then yeah we may have a problem, but we have to smoke them out and this requires a dialogue, either by email, phone or F2F.
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This is very true regarding them believing the pandemic is a real thing, and possibly regarding the best case scenario being keeping the rent the same. But, keep in mind that:
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There’s no way in fucking hell I’m paying $3,880/mo for any 2br apartment anywhere, let alone this one. I mean to put that in perspective, I could buy a 4 bedroom house in this neighborhood for $485K and pay like $2,500 a month on the mortgage. I’d be a little hard pressed to scrape together the down payment, but could probably be in a position to do that in under six months.
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There’s no harm in trying, given that I’m walking if they don’t come way down anyway.
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If they’re willing to take the same amount, they’re almost certainly going to counter. Whereas if I counter with the same amount, they’re not just going to snap call. (Nor do I want to pay the same amount.)
I definitely wasn’t in the past. In Baltimore, when they asked for an increase and a new 12 month lease, I just flat out said no, I’d move if I had to but I wasn’t paying a dollar more and I wasn’t signing a new lease. Never heard from them again on it, lived there quite a while longer. Given that the acquiesced that easily, I probably could have gotten a decrease.
Yeah, I mean right now given their current offers to new renters the MOST they’re going to get is $3,060 a month with the six weeks rent-free. Throw in that they lose another month of rent turning the unit over even if they have somebody waiting, and it’s a push for them to keep my rent the same. Once it becomes clear that I’m not paying an increase, the question on their end becomes:
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Would we rather have cuserounder, who’s never missed a payment, or somebody new?
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How likely is it that we can fill that apartment one month after he moves out? Keeping in mind that the apartment nextdoor is almost identical and has been vacant for 7-8 months AND has not been renovated in that time.
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Everything you say makes sense. And I completely agree there’s no reason not to try. It’s total freeroll.
Moving sucks but I am irrationally willing to blow stuff up when people are dicks to me. I probably couldn’t hold down a real job outside of the weird environments I work in.
Same. Sometimes it turns out to be the best course of action though. My last employer screwed 6 of us employees out of our year end bonuses in the $5-10k range. I was the only one that tried to fight for it. They all just rolled over and took it. My employer refused to pay me, so I quit, and started my own thing. Made more money than before. I told my coworkers they were suckers to stick around, because this wasn’t an isolated incident. Covid hit and they all got fired in March. I feel for them, but sometimes you gotta be willing to blow shit up.
Doesn’t always work out well of course.
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Solid. Don’t pander to her through email, if you do something like that you want it to be over the phone so you can tell in real time if it’s working. You’ll also convey about 100x more sincerity.
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I’ve got multiple similar stories of course. Now that I’ve been self employed it would take an awful lot to get me back on a w2 that didn’t come from an entity I own.
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As Davey Crockett said, “Make sure you’re right and then go ahead”. There is definitely a time and place to blow it up and burn it down. In the example you cite, you appear to be tactical and think things through. That’s all I’m really on about about feigning umbrage. There is an optimal time and place to flip the table. Wherever possible, we can use reason to suppress the reptilian brain fight or flight and get the best deals possible.
And I like the fact that you describe that you quit. Not because I’m glad you quit, but it demonstrates that you have to be willing to follow through in a negotiation.
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