Minimize rent outlay while saving for a down payment.
Though there sometimes may be a host of trials and tribulations when you are a homeowner, the financial advantages of owning a home (with few expectations) are well worth the occasional taxing need for maintenance and repairs.
In fact, the largest benefit of owning a home is the current amount of tax deduction available for most homeowners that directly reduces the net tax due to the Internal Revenue Service and/ or State Franchise Tax Board. However, if you find yourself struggling to come up with the required traditional down payment of 20 percent (in most conventional transaction cases), saving as much as possible while you are forced to rent a home, again, makes logical financial sense.
The data detailing rents in many hot Bay Area markets has been much more positive for the buyer recently. Website Trulia proclaimed that rent amounts in select in-demand cities is down nearly three percent year over year. That is marked change from even six months ago. Data shows that the hot tech-fueled rent increases witnessed over the last several years have reached a peak and began to decline in nearby cities. Quite frankly, the market has equalized as renters have begun to have more leverage as inordinately high-priced units may go uninhabited for lengthy periods of time.
So, how can you save on the one-sided money funnel from your pocket to the landlord’s bank account? The following is a non-exhaustive short list of suggestions.
Ask your landlord for a concession. Whether you are looking for a new place to live or working toward a discount on the current dwelling, perhaps now is a good time to begin a monthly price negotiation discussion. Ultimately, what do you have to lose? Unless landlords are greed obsessed – and can demand ridiculous rent amounts due to optimal location and market scarcity – ask for a reduction if you plan on signing another rental agreement. The vast majority of landlords like to keep good tenants who are low maintenance and do not require a multitude of costly repairs. If you feel that you are not getting a fair rent amount, tactfully “threaten” to leave at the most inopportune time – during the cold months when most renters do not want to move.
Pay several months or a year in advance, in exchange for a discount. Thought this may seem counterintuitive when you are trying to save money for a down payment, in the long run the tactic makes sense; this is true of course if you have the necessary means to pay ahead of time. In this scenario, the old adage certainly rings true, “money talks.” If the landlord wants a little extra in their bank account, ask for a reasonable discount for the act of financial faith. Remember, to remind the landlord how you have been paying on time and plan to stay for a while.
Are you a competent handy person? If so, ask to save rent by repairing things that require maintenance and/or upkeep. Many landlords seek to minimize the outlay of cash, so you can help in this regard if the repairs are within your scope and you feel confident making the needed fixes. A note of caution, do not “get in over your head,” in an attempt to save short term when long-term aggravation may ensue. The last thing a renter wants to do is try to repair something and make the situation worse. The potential damage done to the landlord-renter relationship will be difficult to overcome.
Become a solid referral source. If the landlord owns multiple properties, let it be known that you are ready, willing, and able to help him or her fill any vacancies with solid referrals. Word of mouth referrals are often the most reputable and trustworthy. Here again, caution is warranted. If you make a referral, make darn sure the potential tenant is not likely to cause issues. A scorned landlord will make future conversation awkward – and the trust factor you have worked hard to build will be damaged, in some cases irreparably.
Ultimately, be a model tenant and communicate with your landlord often – without complaining every time something needs repair. Fix the little things you can handle and subtly work toward obtaining monetary outlay reductions via building a solid tenant-landlord relationship while keying on the above-mentioned suggestions.