Pay less rent using these lease renewal tactics
Estheticians find themselves in a variety of locations and businesses. Service providers may function as part-time contractors, or even own a full-service spa with several treatment rooms and amenities. And of course, there’s everything in between, such as renting a room, a studio, or even a unit with several rooms from a landlord. Most estheticians aren’t professional negotiators when it comes to lease agreements. Before you resign on your cozy facial studio, get clear on your negotiation strategy with help from The Lease Coach!
Knowledge is only the beginning of power; it takes experience to really get great deals. Here are eight strategies and tactics used by The Lease Coach for lowering the rent you pay your landlord on your lease renewal for a spa space:
Talk with other tenants in the building
Before getting into lease renewal negotiations with your landlord, talk to your neighbors. The Lease Coach gathers a lot of great intel from other tenants. They will often tell us whether they plan to stay or move, if their rent just went up or how the landlord handled their renewal. Intel from another tenant who has just signed a new lease or renewal is more valuable than learning what another tenant agreed to pay seven years ago. Market rents are based on current deals, not old ones. And don’t be surprised if you get some misinformation too, so try to verify what you are being told by other tenants. Remember, the landlord knows what every tenant in the building is paying for rent – you need to gather similar intel yourself.
Even if you don’t plan to move, it pays to shop around. The Lease Coach makes your landlord earn or re-earn your renewal tenancy by getting proposals from other properties. I know what you are about to say “I don’t want to move.” I’m not saying you should move – but you would be remiss for not shopping around and seeing what deals other landlords are offering. Don’t hand your renewal over to your landlord on a silver platter – we make them bid to keep you. After all, it’s expensive for the landlord to replace a tenant and often more cost effective to keep you, even at a rent reduction.
Let the landlord make the first offer
It’s much easier to negotiate when you see the business terms on paper. We let the landlord rep make the first renewal proposal so we are in a position to counter offer. If you make the first proposal it looks like you are pursuing the landlord – we want the landlord to purse the tenant (after all you are their customer). Ideally, the lease proposal you receive is semi-formal – not a casual email. I often tell the property manager or leasing rep – send me what you want the tenant to sign, not just the highlights. That doesn’t mean we blindly sign it without negotiation, but try to see the entire deal picture before you start negotiating on individual points.
No matter what rental rate you’re offered, flinch a little. Act surprised that the rent is so high. Frequently, the landlord’s first offer is made to test you, to see exactly how you react. If you look visibly relieved or even pleasantly surprised by how reasonable the rental rate is, you can be sure it won’t come down. We practice the walk away and see if they chase you strategy. It can be quite effective. Often, the more patient party is the one who gets the best deal. Negotiating a lease is not about speed but about results.
Ask for justification
Question the landlord, why do they need a rent increase? Introduce some of the intel you have gathered. Use relocation opportunties against the landlord. Rarely are all tenants paying the same rent per sq ft. If the landlord says they can’t lower your rent, The Lease Coach makes them own that statement: “can’t or won’t?” I was consulting with one of my tenant clients in California who wanted me to vigoursly argue all the reasons she deserved a rent reduction. I pointed out that a gentle touch in this instance would be more effective because the landlord already knew the points we were making were valid. When you speak truth, rarely do you need to raise your voice or pound the table to make your point.
Wait to counter-offer
When you receive the leasing agent’s first lease renewal proposal, don’t counter-offer right away, deliberately pause. At The Lease Coach, some of our success comes partially from slowing down the deal making process – not speeding it up as I stated above. My main point is to be deliberate. Don’t look at what they put down in writing – look for what is missing. What new things like additional signage, parking, storage, etc. could I have asked for now that maybe the tenant did not originally get.
Walk away from the negotiating table
I used to work for landlords and I can tell you, rarely does the landlord give their best deal while you are sitting at the negotiating table. Walking away without burning the bridge is an effective tactic. This strategy applies to all aspects of negotiating. I was dealing on a Lexus I wanted to buy. But I said no, and I walked way from the negotiating table. In a few days, I received a phone call. The dealership was lowering the price for me by $8,000. I would have left this money on the table if I had not walked away. But remember, you have to tell them you are walking away (that you are saying no). Saying you will think about the proposal is not walking away. You have to say, “No, I am not buying what you are selling.” But don’t burn the bridge, you want them to think a better deal with rekindle your interest.
Don’t just focus on the rent
The Lease Coach just finished negotiating a lease renewal rent reduction for a tenant, plus we got the tenant four months of free rent to help with cosmetic renovations to the space. Frequently, we can get a renewal tenant an allowance as well, plus their deposit back and removal of personal guaranties. It’s all negotiable. Most tenants have been brainwashed into settling for less, often by agents who are being paid a commission by the landlord. Tenants don’t get what they deserve, you get what you negotiate.