Real Estate Consultant · Somerville, MA · Member since 2008 · 339 posts · 52 votes
17y
I'm in the process right now, actually. very difficult because they've been citing the current lease when the terms serve them, and ignoring it when they don't.
Quick synopsis - doing a lead paint removal program with HUD that imposes rent restrictions so I have to cut their rent by $200/month. To compensate, i need to cut costs and one of those is the free internet access that I include in every rental. My explanation is that I'm losing money on this unit now and have to stop the bleeding.
You can agree with my assessment or not; it's not necessary to analyze their response. Tenants said no. They'd rather have the free Internet than go through the lead paint removal process. They have a 1.5 year old and another baby on the way. So, what I heard from them was:
1) i'd rather surf the Internet than protect my children from a dangerous, known hazard that you are trying to eliminate.
2) I'd rather pay $200 more a month and get "free" internet that costs $50/mo. I'd prefer to go in the hole by $150/mo.
Huh? A lot of this is certainly on me and my personality, but I've never successfully negotiated with a tenant mid-stream. They have nothing at stake in the property, don't really care about its long term viability or whether it goes into foreclosure...they're very short term thinkers and only want all wins in their corner.
Can't recommend it. The time to negotiate, I think, is at turnover or renewal.
Real Estate Consultant · Somerville, MA · Member since 2008 · 339 posts · 52 votes
17y
Negotiation only works when there is give AND take in the discussion. Tenants only want "take"
Despite what the books and classes say, life rarely offers up negotiations with absolute win-win scenarios for everyone. usually both sides lose a little to win a lot.
Real Estate Investor · North Carolina · Member since 2008 · 1k+ posts · 483 votes
17y
The article reemphasizes the importance of knowing your market as well as the importance of the right acquisition price.
College kids' parents will pay up for location and forego certain amenities. Low income tenants are in large supply where I'm at and don't negotiate terms. Blue collar workers want the basic amenities (central air, dishwaher, etc.) plus lower than market rents so if you buy at the right price you can cherry pick those tenants and still cash flow.
If you want to avoid tenants succesfully negiating away your profits you must have something they want that is in short supply.