Money Rehab with Nicole Lapin - Encore: Nicole Negotiates Her Rent!

Episode Date: June 22, 2024

Originally aired April 19, 2022. Money Rehabbers want to know: can you negotiate your rent after signing a lease? Be a fly on the wall as Nicole negotiates her rent with her landlord! Can Nicole get a better deal? You’ll have to tune in to find out!

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need a dictionary to understand. The cold lappin'. Two weeks ago, we talked about negotiating the APR on your credit card. But as I said in that episode, if you're not negotiating everything, you are leaving money on the table. And so I was super stoked to see this question from Sam. I'm really feeling the effects of COVID on my business. I'm a freelancer. I've applied for all the grants and I'm still struggling. I've scaled back on all the frills beneath my apartment, obviously. I just signed a new lease, so I'm stuck. Is there anything I can do to lower my rent? So Sam, as I mentioned in the APR negotiating episode, negotiating is all about the leverage you have and the perk you're asking for. And odds are, in this economy, you'll have some leverage.

I have to be honest, it probably would have been easier to negotiate before you renewed your lease at that higher amount, but it's never too late to start. So here we go. First, decide what you want. If you want to go back to your old rent rate, then maybe start by lowballing your landlord and saying that you want to go lower than what you used to be paying for rent. Then see if you can work your way back to what you used to be paying because you'll probably meet somewhere in the middle. And here's where the leverage comes in. Use all the tools in your financial tool belt. If your credit score is awesome, use that.

If you always pay on time, use that. Get some extra points for being a great tenant in the throes of a recession and pandemic. If none of that works, switch up your strategy. Stick to the rate you want to pay, but offer your landlord something in return. Offer to pay a few months in advance so long as you can secure that lower rate, or say that you'll extend your lease to 15 months instead, offer to use your security deposit toward that lower rate. I mean, you can get creative. Just recognize that you're going to have to participate in this little give and take dance. Sure, your landlord wants to keep raising and raising your rent forever, right? But your landlord can't raise the rent on an apartment that doesn't have a tenant. So be confident in what you're bringing to the table.

You are a good tenant who is willing and able to pay to live in that space, and that gives you an edge. So go for it. You can probably tell that I always put my money where my mouth is. In the very first episode of Money Rehab, I let you listen in on how I coached Tia to negotiate her APR. Now I'm going to let you be a fly on the wall and let you listen into a negotiation between my landlord and moi. You know, I got your message about the rent adjustment request. And Nicole, I'm sorry, but this is not New York.

We don't have the issues that they're having. And we have more demand than we have supply. So not only can I not honor it, but I'm going to have to increase the rent, unfortunately. You've been a great tenant. You've always paid on time. There's no issue with you specifically. But, you know, we did not build this building for charitable reasons. This is a business. And right now there's a lot of people moving to Los Angeles

and we just have a lot more demand than we have supply. So I hope you understand. Now remember, when you're negotiating, bring up your leverage and then ask for what you want. On your mark, get set, go. I, of course, have really liked living there and have paid my rent on time. It's $5,000 a month, which is not cheap. And paid, of course, two months security deposit, which is a generous amount up front. And as you know, you know, COVID is still very real. And I run a business that's taken PPP loans, and it's been an events based business. And so like everyone else, I have also seen a decrease in revenue. So do you think for the next five months that are on my lease, we could get down to $4,000 a month? the lease agreement, you know, I'll, you know, I'll be forced to find other tenants who can not only pay me that, but also paying you the new market rate, which is fortunately for me a little

higher. And I don't see what the motivation would be to do that. And plus, isn't everybody working on Zoom these days? So, you know, isn't the office and home become one thing? And now you can even write it off on your rent because you're spending so much more time working out of your apartment. So at least you get the tax deduction. First of all, us money rehabbers know that is false. As our auditor friend Sylvia told us last week, not everyone who was working from home last year can deduct their space as a home office. Second, so what did I tell you? Oftentimes your landlord will shut down whatever you ask for. So now it's time to dig deep for more leverage. In my case, the building had fucked up

on some maintenance requests that I had filed. Now, I don't really care. Laundry is kind of the least of my worries right now. But for the sake of this negotiation, it is leverage. So I'm going to use it. Yeah, of course. I mean, you and I are both in business, so we definitely know that there are ways to pivot and make more money these days.

I think we wouldn't have another round of stimulus or loans from the government if we were back to normal. And, you know, I've been hustling like so many people as well. And I would love to not have to default on my payments. You know, as you know, there have been a lot of issues with the building. I think I put into the system for maintenance, there was something that was dripping on the AC unit for a little while, and it took a really long time to get fixed. I think it's beyond customary standards, as well as you remember the washer dryer situation has taken double the amount of time to do my load of laundry. I know that one of the workarounds was trying to do less load of laundry, but you're in business too, so that's ultimately the same amount of time. If I take half of it, it's going to take the same amount of time as if I did the whole

thing at a longer period of time. So that's been just a really big hindrance, annoyance in my life. Time is obviously money. You can always get more money. You can't get more time. And so my time is really valuable. And so a lot of these issues within the building have cost me a lot of money and opportunity cost. So I think that if you want to continue to see out the lease, it would be, I think it would be beneficial to both of us so you don't have to lose any time listing it again and showing it to people if we could lower it to $4,500 for the next five months. Well, Nicole, you have been very patient with some of those, some of the breakdowns of, of like you said, laundry and whatnot. And you really have been a stellar tenant. And, you know, I don't want to like to use this analogy, but the, uh, you know, this whole notion of the devil, you know, is better than the one you don't. And I would hate

to lose you if you're an angel, the, uh, and, um, so, I mean, you made a very good case, you know, the, and I don't want, you know, I don't want to lose rent, but I also don't want to lose a tenant who pays on time, who is understanding and patient. And that all is money for me as well. Plus, I have to repaint and everything else. Do you know if you might extend the lease after at market rate or is that something you don't know? So this was an interesting moment. Obviously, it would have helped my case if I committed to re-signing my lease. But I actually know that I'm not going to re-sign.

And lying for the sake of leverage is a cheap shot. And us money rehabbers do not take cheap shots. We take control. And that's what I did. I took control of the situation. I pivoted away from re-signing. And to keep the conversation moving, I got creative and worked my security deposit into the mix. I don't know yet. At this point, I'm leaning

toward not renewing, but I would like to make good on my lease. I don't want to escalate some of the issues that we've had in the building beyond this. I think you and I can work this out without involving lawyers or anyone else. You know, I don't want it to get icky. I think you and I can work this out without involving lawyers or anyone else. You know, I don't want it to get icky. I want to leave, you know, as friends in an amicable way. So, you know, I also gave a generous two-month security deposit and that should come back to me. I've really kept up with the unit. There should be no major repairs to do. So what if I used my security deposit against the rest of the remaining rent? Well, I definitely cannot agree to that. I haven't seen the unit. I don't know in what condition that is. That's not what we agreed to.

I was already leaning towards giving you the 10% discount for the remainder of the lease. And now you're asking to also use your security deposit to pay for some of the coming payments. And I just can't agree to that. And I'm surprised you would ask. This was a hiccup. It's also pretty common in a negotiation. Obviously, my landlord was getting frustrated, and you should be prepared for something like this. A landlord may get frustrated about the prospect of losing money and shut down or even say something cold or aggressive or downright mean. Don't back down. This is your hard-earned money. You have to fight for it even when it gets awkward, especially when you're working your security deposit in. Emphasize that it is your money, and so it is fair that it would come back to you.

I think it's fair to ask for using the security deposit toward rent. These are extraordinary times. We're going through a global pandemic, of course. So, you know, it's money that ultimately is supposed to come back to me. And the money that I'm paying you for rent comes out of that same bank account. So I think it's a fair request. I would, though, suggest if you wanted to allocate half of that security deposit, so $5,000, if we could amortize it over the next five months and say, you know, $1,000 a month comes out of that security deposit. So I could give you $4,000 for the next five months. And then at the end of that, of course, with the caveat, presuming everything is looking good and doesn't need

major repairs, then you could return the remainder of the $5,000 security deposit back. All right. I can agree to that. Okay. But, you know, you have to pay on time. And if you're one day late, then you revert back to the original amount and the original deposit. Agreed? Yes, absolutely. And as you know, you know, I have a great credit score.

I've always paid on time. I've set it up as a direct payment. So there should be no issue moving forward. And I really appreciate your flexibility and accommodation. unprecedented circumstances and I don't want to be I want to be understanding during the times like these as well and like I said before you know you've always been a stellar tenant with without any issues and you've been patient and understanding with us when we've had when we were a little bit behind on our servicing of some of the hardware in your apartment so this is something that we can do. You know, I do hope you understand that this is just a reflection of how you've been as a tenant and not a reflection of the market. So thank you for being somebody who honors their agreements. Understood. Thank you so much. We're all busy trying to run businesses. I want to, of course,

get back to where we were pre-COVID times. I'm sure you do, too. So I want to be respectful of your time and let you go. And then I will just continue to work with the maintenance department through the portal to get the rest of the issues resolved. All right. And I'll have my office send you the adjustment to the lease so we can memorialize what we just discussed and agreed on. That would be great. And you have my email address, of course. Would you like me to sign something additionally? Yes. Don't forget this step. It's super important to get everything you guys talked about in writing. You will be asked to sign something and it'll be forwarded to you via email. And we have that on, unless you've changed it since you moved in, we have it on record. Okay. That sounds good. I will, of course, review that and assuming everything is reflective of what we've talked about in this phone call, I'll get it over to you right away.

Very good. All right. Well, thank you so much. And have a good rest of your day. You as well. Okay. Bye, Nicole. For today's tip, you can take straight to the bank. When it comes to negotiating, your job starts at no. Your landlord is likely not going to say yes to the first thing you propose. So come prepared with your dream scenario and some creative arrangements to make it work. If you want me to do some of your negotiating, I will do it for some lucky, lucky listeners. DM me at moneyrehabshow on Instagram. I'm serious. I will call up your landlord for you and fight for your hard-earned money, but you can do that too. And that's it

for today's episode. I'll see you tomorrow for some more money rehab. In the meantime, don't do anything with your money I wouldn't do. If you don't fully know what that is yet, then you have some more money rehab to do. Money Rehab is a production of iHeartMedia. I'm your host, Nicole Lappin. Our producers are Morgan Lavoie and Catherine Law. Money Rehab is edited and engineered by Brandon Dickert with help from Josh Fisher. Executive producers are Mangesh Hatikadur and Will Pearson. Huge thanks to the OG Money Rehab supervising producer, Michelle Lanz, for her pre-production and development work. And as always, thanks to you for finally investing in yourself

so that you can get it together and get it all.