My Perfect Mortgage
What to Do If Your Rent Is Too Damn High Tips and Tricks
7 minute read
January 9, 2023

When your rent is too damn high, you could start a political party to advocate for reform. You could also write a book about it.

But that’s been done already, and with mixed results.

Instead, why not negotiate for a better deal? Or buy your own home so you can stop paying rent altogether? Freeing yourself from fast-rising rents may not be as hard as you think.

Fire your landlord. Buy a home.

Why are rents so damn high and still rising?

There are a lot of reasons why rent has been rising so fast, and why it’s expected to continue going up in 2023.

One reason is mortgage interest rates. The Fed’s campaign to cool inflation sparked seven interest rate hikes in 2022. Higher rates create higher mortgage payments, so a lot of renters have decided to stay put instead of buying their own homes. This puts more demand on the supply of rental homes.

This is all unfolding within the context of a general housing supply shortage. The shortage has its roots in the 2008 Great Recession but has been exacerbated by the pandemic.

And, then there’s the growing influence of technology. Many landlords use a computer algorithm to set rent prices, and the algorithm is single-mindedly obsessed with optimizing profits for property owners. For example, the computer might keep units empty just to drive up rents in other units.

All in all, it’s an unfriendly market if you’re searching for a new lease. 

9 ways to lower your rent — or to keep your rent low

The best way to fight rising rents? Become your own landlord by buying a home to live in. But what if you’re not ready to buy a home yet? You can still save money on rent by negotiating. You could:

Exchange work for rent credit

Are you good at fixing broken appliances or tidying up the courtyard or interior common areas? Your landlord might consider a lower rent in exchange for your help keeping the place up.

The key here is to get the agreement in writing and to fulfill your end of the bargain. When you make the landlord or property manager’s job easier, you can make a case for paying less in rent. 

Sign a longer lease

You may be able to pay less each month in exchange for committing to a longer lease agreement — staying for two years instead of one, for example.

Landlords who appreciate stability might consider this kind of deal. But don’t do it unless you’re reasonably sure you can stay through the extended lease.

Shop around

Like any commodity, apartments and rental homes vary in price. If you sign a lease for the first place you like, you could be missing out on a better deal nearby.

Shop around in at least three different complexes or neighborhoods before signing a lease. Compare rent prices as well as upfront fees, deposits, and whether you’re responsible for paying the utility bills.

Get a smaller place

Almost always, a two-bedroom unit will cost less than its three-bedroom counterpart. If you can squeeze into a smaller space, you could save a lot.

Or, if you really do need more living space, look for places that are smaller in other ways: for example, find a place without a pool or exercise room — if you don’t use those amenities anyway.

Shop in outlying areas

In most markets, a place downtown costs more than a place in the suburbs. And, prices vary by neighborhood within the suburbs.

Look around at different neighborhood rent prices before signing a lease. You might be surprised by the prices in less popular but still relatively safe areas.  

Mention your renter stability

Is your rental history pristine because you’ve never been late on a payment or left a lease early? Point that out, and try to use it as a bargaining chip.

Some property owners value renter stability above maximizing profits. If you sense your landlord fits this mold, be sure to point out the stability you can bring to the table.

Add a roommate, or rent out the whole place

This one’s a no-brainer. Splitting the rent with a new roommate lowers everybody’s share. But you should skip this advice if you like privacy and simplicity more than saving money.

Instead, you could consider renting your entire place on Airbnb or VRBO, especially if you’re out of town for weeks at a time and live near a convention center, university, or another venue that attracts visitors.   

Check the law

Some larger cities restrict how fast your rent can go up. Check your local laws to find out if you have this kind of protection. If you do, kindly mention the law to your property manager if your rent increase exceeds allowable limits.

Learn more about buying a home.

Pay more upfront

Could you pay a year’s worth of rent upfront? Not everyone can. If so, your landlord might agree to a lower monthly rate in exchange for that big upfront sum. Of course, don’t do this unless you’re as certain as possible you’ll stay through the lease.

5 ways to afford a house sooner than you think

Lots of renters think they’ll never save enough for a down payment on their own home. And with rising rents, saving enough feels even more hopeless.

There are ways to clear this hurdle. If the down payment or other money challenges are keeping you from buying, consider:

Zero-down USDA loans 

You can skip the down payment if you get a USDA loan, and you can get one if you live in a rural area, as defined by the U.S. Department of Agriculture.

“Rural” doesn’t always mean “in the middle of nowhere.” A lot of suburbs fit the USDA’s definition of rural. You’d also need to earn less than 115% of your area’s median income to be eligible for USDA financing.

Ordinary mortgage lenders provide USDA loans which are so-named because the USDA insures them. The USDA also lends money directly to homebuyers through a separate program. Those USDA Direct loans are for people who earn below 80% of their area’s median income.

Rent too high? See what you can buy instead.

Down payment assistance programs

Local down payment assistance programs can help renters come up with the cash they need to become homeowners. Sometimes the assistance comes in the form of a grant or a forgivable loan that never has to be repaid. Other times, you’d need to repay the down payment assistance loan alongside your primary mortgage.

Some programs require a homebuyer education course; others may have income limits. Either way, assistance programs — which tend to come from local governments or nonprofits — can help you become a homeowner sooner.

Also, many loan types, including FHA, let you use gifts from relatives or close friends for closing costs and down payments.

Move to a buyer-friendly area

Remote workers are realizing that home location doesn't matter as much as it used to. They are open to relocating to a place that’s more home buyer friendly, such as:

HomeReady loans

Your income level affects how much house you can buy. HomeReady loans from Fannie Mae will count income from your roommate or boarder instead of relying only on your earnings from work. This can boost your buying power.

HomeReady loans do require 3% down, but you could use down payment assistance. You’d also need to fall within the program’s income limits: Earning more than 80% of your area’s median income disqualifies you.

Buying an investment property

Instead of buying a single-family home, you could buy a duplex — or even a 3- or 4-unit apartment complex — and earn income from all but one of the units. (You’d live in that other unit and, presumably, wouldn’t charge yourself rent.)

With this strategy, your tenants would be making most, or possibly all, of the monthly mortgage payment for you.

FHA loans, which help credit-challenged borrowers get approved, let you do this with only 3.5% down. Keep in mind you’ll be the landlord — the person responsible for collecting rents and keeping up the property. 

Rent is too damn high? Do something to help yourself

Rising rents are upsetting. A lot of renters, understandably, have a lot to say when their landlord raises the rent. Many of the same renters wind up paying the higher rent anyway, despite the pain and frustration.

Sometimes you have no choice. But paying higher rent tells your landlord that you’re OK with paying higher rent.

There are better ways to communicate your displeasure: Ask for a better deal or become a homeowner so you never have to think about paying rent again.

Start the homebuying process now and never pay rent again.

Our advise is based on experience in the mortgage industry and we are dedicated to helping you achieve your goal of owning a home. We may receive compensation from partner banks when you view mortgage rates listed on our website.