Negotiation 101: Five Tips to Negotiate Successfully
Since the end of bad economic news doesn’t seem to be in sight, now is the perfect opportunity for you to renegotiate the terms of your lease. Renegotiating is not easy but it is certainly possible. The following are five helpful negotiating tips:
1. Start early. One of the biggest mistakes that tenants make is waiting too late to start the negotiation process. If you wait until your lease is almost up, you’ve essentially pinned yourself in a corner and you either have to take the owner’s offer, or end up on the street. Approach the owner about six months to a year before your lease is up. And if you don’t have any luck, at least you’ll have plenty of time to look for new space.
2. Do your homework. If you come to the table unprepared, you can count on not getting what you want. Make sure you do your research on your owner before you start to negotiate and pay special attention to vacancy rates and rental rates in comparable buildings.
3. Start high! Ask for everything that you could ever want in the beginning. To move the negotiation forward, you are more than likely going to have to scale back on what you want. But if you go in asking for the minimum, you’ll end up with much less. On the other hand, if you start out with very lofty requirements, you and the owner can probably trim those requests down and you’ll end up right where you need to be.
4. Be flexible. The last thing you want to do is “blow a deal out of the water,” meaning that because of your inflexibility, the owner decides that instead of caving in to your unreasonable demands, it will withdraw from negotiations. Be stern when negotiating but also remember to be flexible.
5. Resist feeling sympathetic. When negotiating, an owner will sometimes try to soften you up by telling you how difficult of a time it’s having managing its buildings. The hope is that you’ll sympathize with its position and give in on some of your demands. Don’t fall for it! As a tenant, you’ve got your own set of problems and do not need to be burdened by the owner’s setbacks. If this happens to you, acknowledge the owner’s problem, but also express your concerns about your situation and use that as a starting point for solid two-way negotiations.