Landlord-tenant relationships can be pleasant at best and catastrophic at worst. The dynamics between a landlord and tenant are colored by the exchange of money and enforcement of rules.
For tenants who can barely afford to pay rent, the situation is stressful; that stress spills over into their relationship with their landlord. Some tenants don’t like being told what they can and can’t do in their own home.
Despite the relational challenges, landlords have certain obligations to their tenants. For example, a landlord must provide livable conditions, a source of heat and hot water, and make necessary repairs in a timely manner. These obligations are unavoidable and, when broken, punishable by law.
A landlord has many practical and safety obligations to tenants, but they aren’t obligated to cut them a good deal on rent.
Landlords aren’t obligated to help tenants afford their rent
Real estate investors buy property to generate income and often have their own bills to pay. It’s not uncommon for an investor to rent a unit while paying off the mortgage and use the excess income to cover repairs and property taxes. Many landlords don’t see a true profit on their investments for many years.
Landlords are obligated to keep rent at or below fair market prices, but they’re not obligated to extend deals to tenants who can’t afford to pay normal rent. With the exception of rent control laws and lease agreements that specify rent obligations, landlords have every right to increase the rent when legally permissible.
While tenants can usually afford small rent increases, large increases can force some tenants to move. It’s not personal – it’s just business.
Landlords need to protect their income above all else
When the market shifts and rents in the area go up, it’s only fair for landlords to increase the rent to fair market prices. Naturally, tenants who can’t afford rent increases will be unhappy and some might need to move. For instance, when one Reno landlord increased rent by more than $300 per month, a long-time tenant had to move out. When the tenant first moved in, rent was $625/month. The tenant was able to afford the first rent increase of $100, but when rent skyrocketed to $1,050/month, she had to move.
In the face of rent increases, many tenants would like their landlord to cut them a deal on rent, but landlords need to protect their investment and income. Some landlords might be willing to accept a counteroffer in order to keep a good tenant. However, that decision is up to each landlord.
Landlords who don’t want to lose a good tenant by increasing the rent turn to other options to make up for lost income. For example, some landlords allow a tenant to sublet a spare room in exchange for a percentage of the subletter’s rent. This helps both the tenant and the landlord.
The reasons landlords don’t give deals on rent
All tenants would love getting a deal on rent, but that’s extremely unlikely. The main reason landlords don’t give tenants deals on rent is because over the course of a year, they’ll lose out on thousands of dollars in income. If landlords reduced the rent by just $200/month, that’s $2,400/year in lost income.
It’s not cheap to own property even after the mortgage is paid off. That lost $2,400 could have gone toward property taxes, property improvements, private road maintenance, repairs, or property management company fees.
Another reason landlords don’t negotiate rent prices is because there are plenty of other tenants willing (and expecting) to pay full price for rent. It doesn’t make sense to bargain with a potential tenant when a number of applicants are ready to pay full price.
Bargaining also tends to lower the perception of value and can establish some bad habits. For example, starting off with low rent can make a tenant feel entitled to a deal forever. A feeling of entitlement makes it impossible to raise the rent even by $100/month without getting backlash from tenants.
Rent increases are unavoidable
Landlords have been raising rents forever. At some point, every tenant will face a rent increase and some of those increases will force them to move. Change and inflation are the nature of the economy. Thankfully, the housing market isn’t anywhere near as bad as it was in 2008. However, tenants who struggle to pay rent might need to consider moving to less populated areas to downsize their expenses before the next rent increase catches them off guard.