Need rent relief? How to ask for a rent reduction (and when!)
There are many reasons why you might want to negotiate your rent with your landlord. Perhaps your employment situation has changed and you’re looking for rent relief or the rental market in your area has slowed down. In this article, we’re sharing tips on how to ask for a rent reduction – but there’s a few things you need to consider first…
Reasons to ask for a rent reduction
There are good reasons and bad reasons to ask for a rent reduction and unfortunately, “I can’t pay my rent” probably won’t cut it. When you sign a formal lease with a fixed term, you’re entering into a legally binding agreement with your landlord. Both renters and landlords have rights and obligations, including the renter’s responsibility to keep up with their rental payments (which are typically paid in advance).
Asking for rent reductions may be warranted when:
- The building is uninhabitable or destroyed (permanently or temporarily) due to damage or on the discovery of unsafe conditions (asbestos, faulty wiring, flooding, etc.); make sure you have evidence of this.
- You’re no longer allowed to legally reside at the property (for example, if the building is re-zoned or has been foreclosed by the bank)
If your lease is up for renewal, you can consider asking for rent reductions as part of negotiations but be aware that requests aren’t always warmly received by landlords. Weigh up how important it is for you to stay in the property if push comes to shove; consider this before asking for a rent reduction:
- You believe (and can demonstrate) that the rental market in your area has slowed down, that the rental prices for similar properties currently advertised have dropped or that they are staying vacant for a long time.
- Your landlord has failed to make necessary/promised repairs in a reasonable amount of time (you’ll want to have proof of any requests/promises made).
Tips on how to ask for a rent reduction and negotiate with your landlord
In most cases, your first course of action should be to contact your landlord (via your managing agent). Here’s how to ask for a rent reduction:
Any request you make to pay less rent should be made in writing and should include as much information about the situation as possible. Make sure you have data or evidence to back up your claims regarding why you should pay less rent. If it’s based on damage/inhabitability or overdue repairs, include photographs and a copy of any communication you’ve previously had about this.
Therefore, it’s important to always have written communication with landlords/managing agents. Even if something is discussed over the phone first, always follow up with an email confirming the conversation so that you have a written copy should you need to refer to it in the future.
If it’s on the basis of comparison with other similar rental properties in the area and your lease is coming up for renewal, make sure you can back up your claims with data, such as this NSW rent tracker tool. Do your research and be able to show proof of why you think your rent is too expensive.
It’s vital to be realistic and respectful when asking for rent reduction. Remember, the home you’re living in is a source of income for the landlord and you’ll need to make a strong argument. If your lease is up for renewal, they may choose to not offer an extension if they feel you have been unreasonable. They may counter your offer or ask for a longer rental agreement in exchange for a rent reduction, so be prepared to negotiate (don’t forget to pay your regular rent in the meantime).
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If you’re able to negotiate a reduction or freeze in your rent with your landlord, you should keep all related paperwork and a written record of any conversations to avoid potential misunderstanding.
In addition, it’s a good idea to keep your own rental diary detailing the date your rent is due, the full amount, the date you make a payment and the amount, along with any statements of receipts.
Tips if you’re struggling to keep up with rent
If you genuinely can’t afford your rental payments, there may be grounds for you to break your lease but in most circumstances, this should be a last resort. It’s very important to prioritise rent payments in your budget as you can be issued with an eviction notice when you fall into arrears. You also want to avoid getting added to a renter’s black list for consistently missing payments.
If you’re struggling to keep up with rent, it’s important to communicate with your landlord early rather than letting rent fall into arrears. They may be willing to come to a temporary agreement/delayed payment plan with you if you have a good payment record and are an excellent tenant – but they are not legally obligated to do so.
For more information and to check out what your rights and responsibilities are as a renter in each state and territory, visit these websites (they may also be able to help you work out how to ask for a rent reduction if it’s warranted):
You can check your eligibility for government rental assistance through Centrelink here. This may help boost your budget to cover your rent if your family or work situation has changed. Depending on your circumstances, you may also be able to seek out a grant or some financial aid from the government and/or a non-profit organisation if it’s an emergency.
Check if you’re eligible for Rent Assistance
Create a budget (or update it)
As mentioned, rent should be your top priority in your budget. The key is to create a budget that includes all of your income and expenses and to be honest with yourself. This will show you where you can adjust your spending habits.
Download our free budget template or contact MyBudget on 1300 300 922 and we can help to create a free budget for you.
In budgeting speak, your non-discretionary expenses describe the cost of keeping a roof over your head, food on the table, a car on the road and any other essentials, such as medicine. Your discretionary expenses are everything else – money you spend on non-essentials.
If you already have a budget, perhaps you need to revisit it and see if any discretionary spending can be reduced (remember, it’s not forever, just while you get back on your feet).
Find an additional income stream
Something we commonly hear at MyBudget is ‘I can’t pay my rent because I had an unexpected expense this month’. Perhaps your income is normally enough to cover rent and other necessities but this month, you’ve had an unexpected expense that’s blown out your budget. Before you panic, put your problem-solving hat on.
Is there a way you can come up with some extra cash by picking up a side-hustle like being an Uber driver, dog-walker or even helping people with picking up furniture (if you have a van/trailer)? Sites like AirTasker connect people who need help with small tasks, with people who have the skills and availability to do it for them.
Remember, the responsible thing to do is communicate with your landlord or managing agent if you’re going to struggle to get rent to them when it’s due; let them know what amount you can pay on time and when you’ll be able to pay the balance. This may help them look more favourably on the situation than if you go radio silent and just miss rent.
Help is at hand
We hope these tips on how to ask for a rent reduction have helped! If you need help re-ordering your financial priorities or finding ways to make your money go further, MyBudget can help.
We offer free budget consultations over the phone. The customised budget we create will give you a detailed view of your finances, so you know exactly how much money you have for rent and bills and it’s yours to keep.
To book your free phone appointment, contact MyBudget on 1300 300 922 or enquire online.
All customised budgets and consultations with money experts are subject to MyBudget’s qualification criteria. We recommend that you read and consider our Product Disclosure Statement.