If you are in the property rental business long enough, eventually someone is going to ask you to negotiate the rental price for one of your units. Some landlords are willing to negotiate, while others have a firm price with no wiggle room. The question of whether you should negotiate the rental price should actually depend on several important factors.
The most important factor that should affect whether or not you are open to negotiating the rent is the local economy. If the demand for rental properties in your local area is low and there are a lot of vacancies, you may be well served by being open to negotiating the rent. This is what is known as a renter's market. In this type of market, renters have the prerogative of being able to shop around.
You might also consider negotiating the rent regardless of the economy if you have a unit that has been vacant for some time. This is not to say that you should throw caution to the wind and be willing to accept just any renter, but if a unit sits vacant for too long, that can have a severe impact on your bottom line.
It should also be kept in mind that you can usually demand a higher rent when you have more amenities to offer to tenants. Conversely, you should consider negotiating the rent if you do not have amenities or perks to offer and comparable units in your area are able to offer perks. Such amenities might include paying for certain utilities for a period of time, waiving certain fees, etc. If you are not able to do that, lowering the rent may be your only option for attracting new tenants.
It is also important to make sure you are aware of the state of the local rental market and how your unit and asking price compare to other units in the area. Tenants are not unlike homebuyers in that they are quite capable of doing their homework and researching the local market. If a renter knows that they can pass up your unit and find a comparable unit at a lower price, you will lose a prospect who could have turned out to be a quality tenant. If you have noticed that you are experiencing a large number of prospective tenants checking in with you, but you never hear back from them, it could be time to update your knowledge on the local market.
Finally, you might consider negotiating the rent when you already have a quality tenant in place and you do not want to lose them. In exchange for lowering the rent, you may want to consider requesting that they sign a long-term lease.
The decision of whether or not to negotiate the rent with tenants is one that can be complex and dynamic, changing based on local economic conditions and even the status of your own units. By remaining open to the topic of negotiating, you can ensure that your property rental business remains competitive.