A lot of things happen as you near the end of your lease. First, you decide whether you want to stay in your apartment. Then, you have to think about how long you want to stay. This will impact whether you ask to take your lease month-to-month or renew for another year. Lastly, you have to sign a new rental agreement, but don't feel surprised if it's not for the same price.
It's typical for a rent increase to occur at the end of your lease. On average, rent will go up between 3 percent and 5 percent. That means if you're paying around $1,500 each month, you'll see an increase between $45 and $75.
If that seems like too much, you have options. Wondering how to avoid a rent increase? We've got five ways to help you save.
Why does rent go up each year?
The fact that there's a standard rent increase means it's pretty common for rent to go up each year. Often rents increase because other costs of maintaining the property go up. Charging more for rent is part of a ripple effect in the need to cover higher expenses. A small rent increase means your property manager is covering for the additional costs on their end. A big rent increase means they're trying to take advantage.
Rent increases may also happen because the property manager is trying to cover the cost of improvements in the apartment. Maybe they had to put in a new appliance over the last year or make a major repair. Maybe they're anticipating higher costs when you move out to replace carpet or paint. These issues can also impact rent prices.
Sometimes you're battling a rent increase you have no control over, but other times you may have a bargaining chip. It doesn't hurt to ask why rent is going up, and then have a discussion about how to prevent it.
How to keep your rent from going up
Figuring out a way to avoid a rent increase can help lower your housing expenses in the long run. It can give you an incentive to stay in your current apartment, and allow you to avoid having to deal with a move.
Here are five strategies that may help put an end to a rent increase.
1. Pay your rent on time or early
The better a tenant you are, the more likely your property manager will hold off on increasing your rent. They don't want to lose you if you're a good renter. One way to do this is to pay your rent on time every month. If you're able to pay it a little early, even better.
This not only makes you more reliable to your property manager, but it helps you, too. Paying rent on time improves your credit score. It may also give you a little power if presented with a rent increase. Because you're a good tenant, you might be able to ask your property manager to reduce the increase. You'll still pay more each month, but not nearly as much.
2. Ask to sign a two-year lease
A standard lease should have language in it about when a property manager can increase rent, and this language usually states rent can't go up until the lease is up for renewal. If you sign a longer lease, you'll have more security when it comes to cost. You'll have it in writing that your rent can't go up until the end of two years, rather than one.
Offering to sign a longer lease is also attractive to property managers. Finding new renters and refreshing an apartment when it's vacant is costly and time-consuming. A property manager would much rather put it off if you're willing to stay for longer than a year. You may even have success negotiating a lower monthly rent with this long-term commitment.
3. Keep your apartment pet-free
One of the best ways to avoid a rent increase is to not have a pet. Renting with pets often translates into extra fees or deposits to help cover the costs of potential pet damage. This not only makes your rent higher right from the start, but it makes property managers nervous. If they see your pet has done damage within the first year of you living there, they may want to raise your rent, when you renew, in anticipation of even more issues.
A pet-friendly apartment usually charges between $15 and $50 per month for owning a pet. Cost varies greatly depending on location, the number of animals and the type of pet. Imagine paying this on top of a rent increase. Your budget already takes a hit having this extra fee, but can you afford it if your rent gets raised?
The best strategy is to wait until you own a home or can easily afford pet fees no matter if rent goes up a little bit each year.
4. Stay put
According to data collected by the U.S. Census Bureau, in 2017, the rate at which renters moved hit a historic low of only 21.7 percent. There's a good reason why — moving is expensive.
Moving expenses can add up fast, and the cost of the entire process is often underestimated. Not only that, but moving requires payment upfront. Unlike a rent increase, you're not paying a little bit over time. When you total up the extra money you'll pay because of a rent increase, you might spend less staying put than forking over the cash to move.
Not only that, but signing a new lease, in a new place, means paying first and last month's rent, a security deposit and other upfront fees. You may not have the money to cover all that. Instead, restructure your budget to afford a slight rent increase, if it's reasonable.
5. Don't ask for upgrades
Is the oven in your apartment older than you? You may really want to ask your property manager for an upgrade, but who do you think pays for that? A property manager may raise the rent to cover the cost of new appliances. Even if you're not asking for an upgrade, when your property manager offers one, don't automatically think it's a freebie. Ask if it comes with an increase in your rent. If it does, hold out if what you've got works fine.
Additionally, if there's a simple maintenance issue, like a clogged toilet or even a broken window, consider fixing it yourself if your lease allows, just don't forget to report it. Every small issue costs someone money, and you don't want that coming back to you through increased rent. At the same time, you want your property manager to know you're making a small repair. That way, if it leads to a more expensive issue, you're not responsible for that, too.
A rent increase isn't the end of the world
For seasoned renters, it's understood that a rent increase is a normal part of the housing market. It's often worthwhile to go with the flow if you love your apartment, and the increase, each year, is small.
However, if you feel like what your property manager is asking is too much, don't hesitate to talk it through with them. Maybe you can avoid a rent increase, or get it to a more reasonable place. Most property managers don't want to lose good tenants, so use that to your advantage to figure out how to avoid a rent increase.