How to Save $4,000/year on Rent with One Email

Rents are falling in San Francisco. Yes, you can pinch yourself — it’s really happening. The average price of a 1-bedroom apartment is down 5.4% from February 2016, and the average 2-bedroom is now renting for $4,500/mo, down 4.9% in the last 12 months.

As a tenant, you can share in these savings. Why let your landlord take home all the extra profits? You know they would raise the rent on you if the market were going up.

I’d like to share with you how last month I decreased my annual rent by $4,200. All it takes is watching the market and minimal knowledge of negotiating.

As a renter in a falling market, you have two advantages. First, when you move out, your landlord loses money. Every day an apartment goes unoccupied is a loss. Second, Craigslist is on your side. It’s laughably easy to assemble a table of comparable apartments.

So, without further ado, here is the email that saved $4,200:

In no particular order, allow me to highlight a few relevant features:

1. There is no ambiguity in what we are asking for. It’s not, “Can you please lower our rent?” It’s, “I am writing to request a 10% rent reduction from $4500/mo to $4050/mo, starting February 1, 2017.”
2. It’s framed as a purely financial decision. There are no ill feelings or sense of being an adversary. This line is important: “We would prefer to stay, with a rent reduction, than to move out. But we are prepared to move if staying no longer makes financial sense.”
3. The landlord’s perspective is addressed: “[Our moving out] would probably require the apartment to be vacant for a month, not to mention the costs of marketing and staff time in preparing the unit for new tenants.” This is persuasive because it’s true. Before the apartment can be rented again, the landlord will have to do repairs and cleaning. This takes money and staff time (more money) in addition to the vacancy. The sentence “I believe it makes financial sense for [Name of Landlord] as well” makes it seem like this is a mutually advantageous decision. Lower our rent… we both win!

Of course, how you write the Comparable Rentals spreadsheet matters too. Here is the screenshot:

Again, a few relevant features:

1. Price/Room is highlighted because it is most relevant to the tenants. Price/SqFt is highlighted because it is most relevant to landlords.
2. Not all of the Comps are in the same place. Some are in the Mission, some are in Bernal Heights, some in Hayes Valley. But they are all comparable in size and quality. And they’re all places with similar quality-of-life in the neighborhood.
3. Brief comments on each of the comps strengthen the case for rent reduction.
4. The sheer number of available comps with lower prices and similar quality makes your case for you. The spreadsheet would not be nearly as effective with only 3–4 comps.

Now before you start haggling with your landlord, the last thing you should consider is timing. One week after receiving this email, our landlord offered us a $350/month (7.8%) reduction in rent. If we signed a new 1-year lease.

That was a smart move by the landlord. Now, even if the rents keep falling farther, we’re locked in at January 2017 prices. If we had waited another few months, perhaps we could have negotiated an even greater reduction.

Still, with the rental market being what it is in San Francisco, it’s safe to say that when you can get a rent decrease, take it! Think about what you’ll do with that $4,200. A 65-inch 4K TV for the apartment? Vacation to Hawaii?

It’s amazing what you can get simply by asking for it.

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