To celebrate the launch of RentPay, we’re doing the math on renting so you don’t have to. This article forms part of our series, The Ultimate Guide to Paying Your Rent & Winning at Life.
Getting a rental property you love can be hard, especially in a tough market. Offering more rent is one way to seal the deal, but it’s worth considering the pros and cons before you jump in.
If you live in a suburb where rents are hot, you might have noticed hints of what feels like a real rental crisis. Depending on what you’re looking for, getting approved for a property can be difficult. You’re often up against competition, and many people could be vying for the same place.
Offering more rent is one thing you can do to improve your chances of success – but it’s not the only thing.
What’s the upside to offering more rent?
- It could speed things up: Offering more rent could increase the likelihood that the landlord will accept your application. It could also decrease the amount of time it takes to process your application.
- Get the place you want: A higher offer could seal the deal on a rental with solid competition. But exercise caution. Always meet the landlord/agent in person, don’t wire money, and – if the deal seems too good – it probably is.
Know what you’re getting into
If you’re thinking of offering more money upfront to secure a rental, don’t set your expectations too high.
An offer to pay more rent doesn’t mean anything. A landlord will usually look for the best tenant (someone who’s respectful of the property and will pay on time) and the best price they can get.
Smart landlords may often price the property a little lower to improve the number of applications and let them find the best fit. This is why tenancy database checks, credit checks, employment verification and references are often run against applicants.
Rather than offering a set amount above the advertised price, you could always ask the landlord: “What will it take for me to get this apartment over another applicant?” Their answer should give you some idea of the state of play.
What’s the difference between offering higher rent and rental bidding?
You don’t have to look too far to see some landlords/agents have encouraged rent bidding to maximise income.
To come out on top, this has created a situation where renters are asked to offer a higher weekly rent (‘rental bidding’) to months of rent in advance.
So, what exactly is rental bidding?
Rental bidding can happen when there’s a shortage of available rentals. In some cases, landlords/agents encourage renters to make an offer above the advertised price for a better chance of securing the property.
The practice is banned in a few states (Queensland and Victoria, for example), but the laws say that agents can accept higher, unprompted offers from renters.
Renters aren’t to blame for this situation, either. Some circumstances can drive people to offer a higher price, but it’s not the ideal scenario.
- You can find yourself locked into a rental contract that’s unaffordable for your lease.
- Rental bidding puts upward pressure on rent prices, which can hurt all renters.
So yes. You’re certainly entitled to offer (of your own accord) a sweetener to entice the landlord/agent to accept your application over someone else or overcome any weakness in your profile.
If you’re up against some serious competition, you gotta do what you gotta do. Just be wary of landlords/agents who engage in rental bidding and know what the law says in your state. Don’t go the underhanded way and hate on your fellow hopefuls, and all will be fair in the race for the best apartment.