Friday, September 9, 2011

How to reduce your rent - 7 ways to do that


A friend looking to relocate to London recently asked me how much she should offer to pay for a one-bedroom in central London. "What's your budget?" I asked. "Hmm, not more than £500 per week," came the answer. There was a moment of silence as I sat there stunned. She looked a bit worried, "you mean that's not enough?"

For those who are looking to move to London, rest assured that £500 per week for a one-bedroom flat is plenty for a long lease. In fact, £400 per week would get you a decent one in most of central London. If you were to check out London Property Watch, you would see of the recent rental prices agreed upon.

I did hint to her that forking out £500 per week for a one-bedroom property is hardly wise. The last thing I want her to do is to march into the agent office waving that kind of money and spoiling the market. Even then, it is true that rental prices across London has increased a fair bit over the last two years. If you are looking to rent, here are seven ways of reducing the rent.

1. Go for unfurnished or partly furnished properties

While most properties come fully furnished, some come only partly furnished or unfurnished. This is usually included in the property description. Unfurnished properties usually doesn't come with white goods, which include large electrical home appliances such as fridges and washer dryers, and other furniture including sofas, bed, dining table.

If you happen to have your own furniture or better still, pick up a discarded one from Freecycle, you would shave off quite a bit off your rent.

2. Ask to exclude bills

Some landlords would include all utility bills (gas, electricity and water) in the rent. This increases the attractiveness of the property especially for those who do not wish to be bothered with the hassle of having to keep up with the bills.

Ask for the rent price if the utilities were to be excluded. If that's an option that the landlord would consider, do your sums to see whether it would translate to a lower monthly expense. For utility prices comparison, I normally heard to uSwitch and Moneysupermarket.

Further, having your own name on the bills helps in credit building as well. For more details on that, as well as flatsharing (which shaves off a huge chunk off the rent), refer to Tips for Flatsharing in London.

3. Cut out the middlemen

Going to an agent saves you time to look around for properties. Basically, you could just walk into a one of the property agent offices, list down your requirements and be shown a list of properties the within a couple of days. Further, some properties are only available through agents as landlords prefer that they do the first screening of prospective tenants.

The convenience doesn't come for free though. The agents would charge you a reference fee, which can be more than a hundred pounds. Not only that, they would then charge the landlords a servicing fee as well, which is a percentage of the rent agreed upon. As such, removing agents from the equation would reduce the costs for both sides. With the lower cost, landlords would be more willing to lower their rent as well. To do that, look for properties listed in Gumtree or Loot.

4. Time your rental

This is not for everyone as some of us absolutely have to get a place at a specific time (i.e. students during August and September). But if you have a choice, try searching only during winter and early spring. That's when most people are either away for holidays or simply too miserable to step out of their homes to view properties.

Granted that the rental market wouldn't be flooded with properties but those that are would have their prices depressed. Better still, as most tenancy come with a 12 month contract, you'll be up for renewal the following winter, which will again put you in a better bargaining position.

5. Ask for a longer tenancy

All things equal, like bulk purchases, a longer tenancy period will get you a lower rent. One thing that landlords hate most is uncertainty. If your credit references checked out, they would definitely prefer to have an assured income stream then to go through the whole process of looking for a new tenant.

If you are certain that you'll be in for a longer haul, ask for the price for a longer tenancy. To lower it further, forgo the break clause (some agreements allow either side to terminate the contract after a certain number of months) to give the landlord added assurance. It would be an added bonus if you could time it such that your lease ends in the winter months (see above point).

6. If you are the right fit, flaunt it

Beside assurance, landlords would like minimal wear and tear to their furniture and fittings. I have heard of landlords giving preferential rates to tenants who are female non-smokers who have neither children nor pets, living on their own and have to travel for most of the time. If you tick any of those boxes, flaunt it.

7. Scratch your landlord's back

This is again not for everyone. If you have some spare time on your hand and have some relevant skills, why not volunteer to help out the landlord in return for a lower rent? Babysitting is a popular one, gardening if you have green fingers, simple carpentry if you are handy with a saw. This is a time to be creative.

Regardless of what you do, just remember the golden rule - you'll never get it if you don't ask for it. It would be a no at most and you can always shop around for more properties.

Did I miss out any other ways of reducing the rent? Also check out Where to Stay in London.

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