Negotiating a new rental agreement

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The end of your rental agreement is fast approaching and ideally, you would love to stay. So what happens now? Do you need to wait for the property owner to put something forward or can you indicate your interest and propose your own terms.

Let’s look at how to negotiate a new rental agreement from the perspective of the renter…

When to start negotiating

Regardless of whether you have a six-month or 12-month rental agreement, you’ll need to start considering what you want to do long in advance of the agreement’s end date.

In fact, rental negotiations should take place about three months before the agreement ends. Why? Because in some states, such as Queensland, a renter must be given two months notice to vacate the property at the end of the agreement.

That means the property owner will be considering their future plans about 12 weeks prior to the end of the rental term.

What to consider

As the renter, you need to consider a few things when it comes to negotiating, including:

1.     Do you want to renew or are you planning to move elsewhere?
2.     How much are you willing to pay? Would increased rent be appropriate? Is there a maximum price you would pay or a rental increase that you would walk away from? On the flipside, might a rental reduction in order? Or do you believe what you are currently paying is fair?
3.     How long would you like the future rental agreement to be (six months, 12 months)?
4.     Are there any special conditions you would like to negotiate, such as lawn and garden care?

How to put your proposal forward

If you want to be on the front foot when it comes to negotiating, express your intentions in writing.

Indicate whether you wish to sign a further agreement, for how long and what price you would be willing to pay.

Your property manager may also reach out to you about three months prior to the agreement ending to gauge your intentions and this is a good time to be honest about what you hope will occur.

Factors to weigh up

The reality is most owners value good renters and hope to keep them. That means they might forgo a rent increase in the interest of retaining a renter who looks after the property and pays their rent on time.

Owners also value longer agreements as they allow for certainty and reduce the cost of advertising for new renters or signing a new agreement. So, consider that an owner might accept a smaller rent increase or no rent increase at all if they have the surety their property will be rented for the next year.

And remember, you can always reach out to your property manager to gauge the situation, including current market conditions, owner intentions, available alternative rentals and more.

How we can help

Our experienced property managers pride themselves on establishing great relationships with both rental occupiers and owners.

We manage every property as if it were our own and you can learn more about our property management services here.

Alternatively, if you are looking to rent a property, you can view the properties we currently have available here.