A friend told me that landlords may give a renter a nice discount if they prepay a year or more in advance. Is this true? If so, then how much of a discount should I ask for?
I am a single mom of two kids, and 1 is autistic and I want to continue working at home so that I can supervise his inhome therapy. During this time, I will be working, but I will have to cut some hours. My son's godfather says he'll donate $6,000 to prepay at least a year's worth of rent for us, so that will be one less thing on my shoulders. If I get a place for $350/month (yes, this is the rural South, lol), the money will cover about 17 months of rent...with a prepayment, how much of a discount should I ask for, to make the money stretch as many months as possible? Or is what my friend told me even true?
I figured I'd ask here before I approach potential landlords.
2007-07-29 13:44:04 · 4 answers · asked by merebear83 2 in Business & Finance ➔ Renting & Real Estate
I'd prepay my rent (now I own) for six months and never received a discount nor was offerred. For a year+, just ask "Do you offer any discounts?" May want to check if the landlord will even accept large payments. A friend of mine had a landlord who ONLY accepted payments monthly.
2007-07-29 13:48:22 · answer #1 · answered by isisjean 3 · 0⤊ 0⤋
$350 per month for a year is $4200 total rent for that year. The prepayment discount would probably be either what the landlord could reasonably expect to earn with the money you pay up front for the time you're prepaying, or what he could save if he used it to pay bills now instead of over the year.
In the first case, if you offer $4000, and the landlord can get 5% interest on the money, he'll earn $200, and you all will be even. You'll get a little more than half a month free.
In the 2nd case, if he owes someone $4000, will pay it off over one year, and is paying 7%, he will pay about $150 in interest over the life of the loan. If he has a credit card bill to pay, he's probably paying a lot more than 7%.
If you want to offer to prepay, then offer to discount the rent by $250-$300. You'll be a bit further ahead than these scenarios, and you might get a landlord that's fuzzy at math.
But I wouldn't go prepay any further than a year, or even 6 months, if you think there is ANY chance that your situation may change and you may move. Otherwise, if you have to move before the time is up, you may forfeit the money that's been paid for the amount of the lease that you don't use. Even if it's not your money, you'd probably feel guilty for losing the money for your son's godfather.
If you offer to prepay for 6 months, just cut the amounts above in half, and you'll be in the ballpark.
2007-07-29 21:00:25 · answer #2 · answered by Ralfcoder 7 · 0⤊ 0⤋
As a landlord I would love it if someone would pay me for a years worth of rent. For one, it would allow me to use all that money instantly to invest in another property or other investment vehicle to gain even more returns that is not available with just the monthly rent. It also shows me that you are for sure going to be living in the property for as long as you paid for (if not that is actually better for me because I would have all your money upfront!) If I had any property in your area I would definitely let you pay for a year in advance. It depends on each person as far as how much of a discount you can ask for. I would probably start with about a 5-10 percent discount and it can always be negotiated where the both of you feel comfortable! Good luck!
2007-07-29 20:52:29 · answer #3 · answered by Austin S 1 · 0⤊ 0⤋
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2007-08-01 13:49:43 · answer #4 · answered by Anonymous · 0⤊ 0⤋