RENTAL REDUCTION GUIDE
As you are aware, Australia is headed into unprecedented troubled times with the Coronavirus' hit to the economy, JobKeeper ending, and the mortgage repayment holiday ending at the same time at the end of September.
Many landlords are also aware of this and are keen to lock their tenants into new leases before this double-whammy hits and high unemployment makes properties much harder to rent out.
This presents an opportunity for you to negotiate a rent reduction for the next six to twelve months or to negotiate down the asking price on a new rental home.
We are also hearing that some landlords are offering the first two weeks rent free to tenants so that they don't need to pay rent on two places at the same time after giving notice to their old landlord so this is worth asking about.
If a landlord is optimistic about the post-Coronavirus recovery they will probably only want to offer you a six month lease at a reduced rate, but if they are more fearful a twelve month reduction is probably more desirable to them.
In order to be in the strongest position to negotiate the rent down it is important that you go to the property manager armed with the strongest case for a reduction.
Here are some online tools we recommend in building your case for a reduction:
-Use the COVID-19 Financial Impact Index to find out how hard hit households are in your postcode and surrounding areas https://taylorfry.com.au/articles/covid-19-financial-impact-index/.
If your town or suburb is rated as highly affected then it is likely that there will be more vacancies and more of a renters market in your area.
-You can also use this online resource to find the vacancy rate in your postcode https://sqmresearch.com.au/vacancy.php The vacancy rate in many parts of Australia is already much higher than it was this time last year.
-Use the major real estate websites like Domain and RealEstate.com.au to discover the number of vacant properties that are equivalent to the type you live in or would like to move into in your area.
If you can find equivalent properties that are renting for less than your home or one you would like to move into, this is another argument you can make for a rent reduction.
-Search the rental listings to find out which ones have been listed for the longest as these properties may be more desperate to get a tenant in.
-Remember that in the current environment the listed rental price is aspirational on the part of the owner or property manager so there will probably be room to negotiate that price down when you inspect a property in person if there is not a lot of other interest in it. Asking for a 20%-30% discount on the advertised rent is not unrealistic at this time.
-If you are not on a lease or your lease is ending sooner, tell your property manager that you are looking at properties to see if you can get a better deal but that you would prefer to not go through the inconvenience of moving if you can avoid it. They may come back to you with a better offer to get you to sign a new lease when your lease runs out.
-If you are on a lease with many months left on it will probably be much harder to negotiate a rent reduction at this time, but you may find that after November it is more affordable to break your lease and move to a cheaper equivalent property than stay where you are and so that may be a bargaining chip you can use later in the year.
We hope that you are all safe and well during these unique times and that many of you are able to secure more affordable rents as a silver lining.