Scoring an Apartment and Getting the Best Deal

I suspect leasing is more important than looking.

Searching for an apartment has always annoyed me.  And having lived in more than a few apartments, that’s a lot of annoyance. Suffice it to say the stereotypes are true and you all know it.  In recent years, apartment building has been gangbusters in Dallas. Everyone wonders if there’s a bubble coming in the high rents asked by these newer buildings.  I’d call it more effervescence than the giddiness of popping bubble wrap.

I’m not going to try and navigate your individual peccadillos, but there are some things to understand and tricks to use in scoring the best rent wherever you look.

… even if it’s in the hallway or elevator.

Butts in Seats: When a new building opens its doors, management is hell-bent on filling units. As long as there’s a pulse and a cleared check, you’re in.  What that means is that for the first few years, there’s often a laxity in applying rules to bad neighbors.  Partying, light damage, and pet pottying in public areas are all tolerated.  You can scream all you like, nothing will happen.  Eventually, the bad elements are shown the door, but it’s much later, after the building is full. It’s easier to replace bad tenants when the rest of the building is rented-up.  Remember, they’re in the business of collecting rent, your happiness comes in second.  Many apartment management companies will bemoan this pessimistic view, but I’ve lived it, and they know when a building is half empty, I’m right.  For this reason, I will never, ever rent in a brand new building again.

New Building Discounts: If you can stand the potential of having noisy, smelly neighbors, and just HAVE to be in a brand-new building, scout out discounts. When a complex is looking for butts in seats, there are discounts to be nabbed.  Look at between one- and three- months’ rent for a 12-plus-month lease (even in tony Uptown). If it’s not at one building, it’ll be at the next.  Keep looking.  Also, new-building discounts may not immediately show up. They cream the crop of first-come, and sometimes reservation renters before the eventual post-opening lull.

Bargaining on the Rent:  If you want a deal in rent, don’t use a Realtor or apartment service.  Sure, DIY will cost you shoe leather, but those helpers aren’t working for nothing. The apartment complex gives them a commission.  Your job is to find your own apartment and snag as much of that commission as you can.  Figure it’s at least a month’s rent. If the apartment complex won’t bargain with you and it’s the be-all, end-all apartment, find a service/Realtor who will split the money with you.  There are tons of them.  Some offer a rebate along with free moving services.  After all, they’re doing nothing at that point besides collecting the check.

Parcel those three rules together and you see the potential for up to three months off the rent in a new chi-chi apartment complex … that’s 25 percent.  It’ll cost you time to find the apartment and maybe ear plugs once you’re in, but on a $1,500 apartment, that’s a potential savings of $3,000 to $4,500 that first year.

No Reservations: All the large apartment companies have online floor plans, prices and lease terms posted.  Nearly all will tell you what units are currently available and which will be available in the coming weeks, sometimes months.  If you’re looking for a deal, never “reserve” an apartment for the distant future. Why?  The further out, the less desperate the landlord and the more expensive it will be.  Apartments that are sitting empty are losing landlords’ money today. The longer a unit is empty, the more of a discount you’ll find. Sure, it might be $30 a month ($360 a year) or is might be $100 or more ($1,200 per year).  While mom-and-pop landlords are unlikely to have the sophisticated online tools, lowering the rent to get a tenant paying rent today on an empty unit is universal.

Merry-go-Moving Vans: Once you score those discounts, don’t expect them at renewal.  The complex may still have their discount shingle hanging out front, but you’ve moved in.  Management companies bargain that the cost and annoyance of moving will keep you put.  They’ve also derived their original discounts by amortizing the average tenant’s tenure (longer than one lease). Continuing to discount impacts your profitability to them.

What they don’t factor in are cash-strapped young people with a potent elixir of beer, pizza, friends, and Mom’s Suburban.  And don’t forget those apartment finders that offer help with a move. After all, the more you move, the more commissions they collect.

More than one neighbor has complained about the move-in, move-out conga line blocking streets as apartment hoppers alight for more discounted pastures. Remember, Millennials have little brand or job loyalty, where they live is no different (especially when they’re on the edge of their budget).

Why Don’t They Just Lower The Rent?

If they lower the rent across the board, that means everyone gets it.  To them, that’s leaving money on the table they may not have to give.  Also, if the overall rent is lowered, that makes it harder to raise rents in subsequent years.  It’s easier to raise the rent to $1,050 from $1,000 than from $900 a month. Lower initial rent would impact your profitability for several years. The pricing model for apartments is to get you in, and hope the pain of moving keeps you there.

The Biggest Secret of All

If you’re saving to buy a house or condo, stay focused.  Getting dewy-eyed over a glam apartment is silly.  Get into an older building that’s well-maintained but lacks a concierge and coffee service. A few years in a “less than” apartment ain’t gonna kill you.  Save those pennies because you’ll get more when you buy, and you’ll buy sooner.

 

Remember:  High-rises, HOAs and renovation are my beat. But I also appreciate modern and historical architecture balanced against the YIMBY movement.  If you’re interested in hosting a :.com Staff Meeting event, I’m your guy. In 2016 and 2017, the National Association of Real Estate Editors has recognized my writing with two Bronze (2016, 2017) and two Silver (2016, 2017) awards.  Have a story to tell or a marriage proposal to make?  Shoot me an email sharewithjon@candysdirt.com.