How Newcomers Can Negotiate for Cheaper Rent

Two months free rent. One month free rent. Free internet. A move-in credit. Free parking. For newcomers to Canada and international students, these are just a few of the incentives landlords across the country offer in rent price negotiations as asking rents fall and more and more rental units of all types come on the market amid lower immigration.

Housing experts agree that Canada is a solid “renters market.” Newcomers are encouraged to take advantage of this and negotiate with landlords for cheaper rent and numerous rental incentives. After all, rental costs are a newcomer's most significant monthly expense.

Not long ago, rents in Canada increased monthly, but that has changed. According to the latest Rentals.ca Report, average asking rents in Canada fell compared to a year ago for the fifth consecutive month in February, dropping 4.8% to $2,988.

That’s the lowest level since July 2023.

The February 4.8% drop was also the most dramatic since April 2021, during the COVID-19 pandemic. In February 2024, asking rents had risen a whopping 10.5% from February 2023!

So, the rental market for newcomers to Canada and international students, especially in places such as Toronto and Vancouver, is changing rapidly as rent prices and demand fall, making it an excellent time to negotiate.

Rent Affordability is a Major Issue for Newcomers

However, despite this continuing drop in asking rent prices, affordability remains an issue for many immigrants and students. Average asking rents in February were still 5.2% higher than two years earlier in February 2023 and 16.9% higher than the pre-COVID level from February 2020. This makes negotiating for cheaper rent even more important for newcomers.

So, how do the one- or two-month free rent incentives work?

These deals are usually limited-time offers, requiring the renter to sign a long-term lease, usually 14 months, which likely requires a security or damage deposit.

According to Rentsync, free rent offers make up almost 40% of all active concessions in Toronto, indicative of a more price-orientated renter market. In Vancouver, landlords are more likely to offer quality-of-life incentives, such as utilities, Wi-Fi, and parking, than rent reductions.

Rent incentives or concessions can significantly lower your monthly rent

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Nationally, Rentsync estimates that the average rent incentive or concession value is $786, representing about 36%, or one-third, of the total national average monthly rent.

How to Calculate How Much You Can Save

According to Rentals.ca, a one-bedroom apartment in Toronto costs $2,359 monthly.

Signing a 14-month lease means the tenant would owe $33,026 worth of rent over that period.

With the incentive, you get two months free ($2,359 x 2 = $4,718).

Amortizing that $4,718 savings over 14 months is $337 a month, thus making your monthly rent on that apartment $2,022 rather than $2,359.

Negotiating rent is common, and it’s a smart way to make a great rental fit into your budget
- Nick Potkidis, CBRE Toronto Downtown

Publicly, your landlord will want to keep the advertised market-list rental price of the apartment at $2,359 rather than officially drop the price to $2,022.

However, even with free-rent incentives, newcomers and international students can still be priced out of the market, perhaps forcing them to have a roommate or to become a housemate.

Popular Landlord Rental Incentives

In addition to free rent, Canadian landlords are offering other incentives to attract renters. Here are some of the most popular rent incentives on the market:

Rent-free: A determined period when the tenant doesn't pay rent.
Monthly rent reduction: A temporary reduction in rent payments.
Free WiFi/Cable: This is a popular monthly offering, particularly in condo buildings.
Rent affordability incentive: An incentive that can help tenants build a credit history.
Flexible lease terms: This is good for renters who want shorter commitments.
Free utilities: This is usually for a determined period.
Free parking/storage: Popular with tenants that own cars.
Referral programs: Pay current tenants a bonus to attract new tenants through word of mouth.
Tenant improvement allowance: A way to encourage tenants to sign or renew a lease by improving the property.
Paying your moving expenses: A landlord may offer this incentive to help tenants terminate a lease early.
Cash rebates: A one-time, lump-sum payment that landlords may provide tenants.
Gifts: Free dinner or movie gift cards are popular concessions.

Being a Good Tenant Pays Off

Here's an essential point for newcomers and students renting their first long-term apartment to remember: Besides using your rent payments to build a Canadian credit history, being known as a good tenant will impress future landlords.

Landlords love good tenants, and tenant retention is key to a hassle-free experience for both landlord and tenant. So, landlords will also offer incentives to long-standing tenants to keep them.

Landlords Want to Avoid Turnover Costs

So, if you've been in Canada for a year and are a quality tenant, don't hesitate to ask your landlord for an incentive to renew your lease.

Landlords everywhere strive to attract quality tenants and retain them. They want to avoid tenant turnover costs (advertising, cleaning, repairs, administration, etc.).

Good tenants also bring the landlord rental income stability, so don't be hesitant to negotiate the following:

- A renewal discount.

- Improvements to the unit.

- More flexible lease terms.

- More parking.

- A gym membership.

- More storage.

Negotiating for cheaper rent can help your budget

How Newcomers Can Negotiate for Cheaper Rent

Nick Potkidis, the Vice President and Sales Manager of CBRE Toronto Downtown, has advised newcomers and international students renting for the first time not to assume that the listed price of an apartment is the price of the apartment. "Guess what," said Potkidis. "That's not the case. Negotiating rent is common, and it's a smart way to make a great rental fit into your budget."

"If your rental application is super strong, you have a little leverage: landlords love a reliable, financially stable renter."

Potkidis said this is how newcomers and international students can negotiate for lower rent:

- Be sure to allow plenty of time to find a place. Don't let urgency hamper your ability to negotiate.

- If you want to rent through a real estate agent, use an agent who knows your chosen neighbourhood or building and will negotiate on your behalf (renting through a realtor is free).

- If you're looking for a rental alone, check what other nearby units or buildings have been leased recently.

- Check out rentals on the market for over a month. The landlord might be in the mood to negotiate a much lower price.

- Promote yourself and your assets: Good credit (Canadian or foreign), good job/income and good references.

- Also, offering to clean or paint the apartment at your own expense can show your commitment to making the deal work.

How newcomers should negotiate for cheaper rent

Potkidis also offers these tips on how newcomers and international students should negotiate with a Canadian landlord:

· Be polite and professional, not aggressive.

· Explain in detail why you'd make a great tenant. A landlord will only lower your rent if you are someone they'd like as a tenant.

· Politely but confidently let the landlord know that you have other options. When negotiating rent, make it clear to the landlord (respectfully, reminds Potkidis) that their rental is one of the few you're assessing.

· Know how much you can afford to pay and make the landlord the right offer. Be sure it's not insulting.

· Be flexible regarding the lease. Maybe the landlord will lower the price in return for a longer lease.

· Consider non-monetary concessions. If the landlord doesn't want to lower the price, perhaps they'll consider an extra parking pass, more storage space or hiring you to do some work for them.

Finally, Potkidis reminds newcomers, "It never hurts to ask (for lower rent), if you negotiate rent the right way."

Landlords may offer newcomers an extra or free parking space

Rental Negotiation Action Plan for Newcomers:

- Research rental pricing and trends for different cities across Canada using the Rentals for Newcomers site.

- Develop a housing search plan using the Rentals for Newcomers site's blogs, videos and news stories.

- Consider using a real estate agent to find a rental and negotiate with the landlord.

- Be confident but polite and flexible during negotiations.

- Promote yourself and your assets (job, credit rating, references, personal history, etc.) to the landlord.

- Once you have your rental, get tenant insurance to protect your possessions.

SOURCES: Rentals.ca, Rentsync, CBRE

Steve Tustin is the Content Editor for Rentals for Newcomers and a contributing editor for Prepare for Canada. He is also the former managing editor of Storeys.com and a former senior editor at the Globe and Mail and the Toronto Star.

Rentals for Newcomers provides rental solutions for newcomers and is powered by Rentsync, a North American market leader for property technology within the multifamily apartment industry. This gives Rentals for Newcomers access to the latest rental technology, tools, insights, and trends.