Dear Ali:
We have an apartment that we like (which is a little bit unique in terms of location and size) and we signed our lease renewal in December 2008, not long after the fall of Lehman. Our landlord sent over our new lease for this year, and the price is flat — but my impression is that market prices have fallen 20 percent. Is this fair? How do we get him to drop the price? We really don’t want to move. P.S. we live in New York City.
A: Okay, I’m going to start off with a really cornpone story, but I did grow up in Arkansas.
We had 40 spare acres in a nearby county — (the New York City translation of that is maybe a cabin in the Catskills, while the Chicago translation is maybe a place in Michigan) and we used to go up there and shoot for fun. So I was taught to handle first a BB and then a rifle when I was what sophisticated city people would consider shockingly young — around age 8 or so.
And I still remember my dad’s rules of gun safety: never shoot into water because the bullet will bounce back at you, never point a gun at a man unless you intend to shoot him, and never shoot at a man unless you intend to kill him.
So back to real estate: I think running comps without having a back-up apartment is like pointing a gun you don’t intend to shoot. I had one rental client do this, against my advice, and although she demonstrated that she SHOULD save $1,000 a month on her lease renewal, based on how the market had tanked, the LL only offered her a token $300, figuring, what’s she going to do, move?
If you don’t have an alternative place to move to, you’re pointing an empty gun at a guy and saying, “bang.” Maybe a little flag comes out, but it doesn’t get you what you want.
So I would at the very least try to come up with an apartment that you would conceivably move to, so it looks like your gun is loaded. You’re much more likely to get your fair price that way.
Oh, and in case you were wondering, I don’t live in a hunting culture anymore so I no longer shoot animals, but I am still a meat-eater, and I take moral responsibility for that. So if somebody else wants to bring me a duck they’ve shot (Texans, you know who you are) I’ll be happy to cook it up and serve it for dinner.
