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Wheeling and dealing   If  you’re  looking  to  lease  you  are  in  a  strong  position,  given the state of the market, says Jane Drew. Here are some tips for would-be tenants hoping to slash their rental bill     Rents have been falling across Hong Kong since August,  and  according  to  a  Colliers  survey, they  reached  the  lowest  level  in  18  months this  January.  What’s  more,  home  leases  are expected  to drop as much as 15 percent  to 20 percent  this  year.  This may  be  bad  news  for landlords but  it puts  tenants  in  a great position  to negotiate before they ink the deal. “It’s  definitely  a  tenant’s  market,”  says  Anne-Marie  Sage, regional director of residential at Jones Lang LaSalle, “and a lot of people are trading up. You can get a better-quality apartment as well as one  that  is bigger, with better  facilities  in a better building.  People  can  also  look  in  Central  and  the Mid-Levels rather than to the east or west.” Realtors have noticed a huge increase in stock in the past three to four months, partly driven by people trying to rent out their homes  rather  than  sell  in  the  current market.  This  obviously puts would-be  tenants  in a great position  to bargain  the  rent down, as does the fact that landlords are becoming desperate to  find  tenants  before  the market  drops  further.  Offering  50 percent less is probably a bit extreme, but you should be able to get a rent reduction of between 25 percent and 35 percent. “HK$30,000 is now HK$50,000,” confirms Sage. How much  a  landlord  is  willing  to  negotiate  will  depend  on any number of  factors,  including  the size of his portfolio,  the individual building type and the  locale. “Landlords have been reducing  their  rents more aggressively  in  the Mid-Levels  than on the South-Side,” notes Sage. “This is clearly indicative of the number of banking executives moving out of the Mid-Levels.” Nine  times out of  ten, of course, you will be negotiating  rental terms  through a  realtor,  rather  than directly with  the  landlord. While some would hope  to cut out  the middle man, Sage says relying  on  a  realtor  can  work  in  the  tenants’  favour.  “Local landlords don’t like to negotiate – it makes them uncomfortable – and they certainly don’t like any aggression. They will walk away, preferring to leave an apartment empty rather than have someone they feel has insulted them living in their flat. The agency fee can therefore weigh out what you wouldn’t get face to face.” Begin  by  finding  out  what  similar  properties  cost  to  rent  in the area you would  like to  live.  If you can get a better-quality apartment for the same rent, tell your agent about it. It’s easy enough  to  check  the market  value  of  a  property  (you’ll  find plenty  of  listings  at  www.squarefoot.com.hk)  but  remember what  you’ll  see  is  the  advertised  price  not  the  final  agreed rental rate. Ask  your  realtor  how  long  the  property  you  are  looking  to rent  has  been  empty.  A  landlord  loses money  every  day  his property  is  vacant,  so  if  it’s been on  the market  a  long  time he may  be willing  to  accept  a  low  offer.  If  you  can move  in immediately,  you  are  in  a  particularly  strong  position  to  get the rent reduced. All landlords want consistent, decent, quiet tenants, so let them know you fit the bill. Give your realtor a portfolio of documents showing  what  a  great  tenant  you  are  –  before  asking  for  a rent reduction. If possible provide a reference from a previous landlord.  If  you  don’t  have  great  credit  but  you  do  have  a good job, bring along a glowing reference from your employer detailing  your  high  standing within  the  company  and  stating your current salary. When viewing homes with a realtor, dress your best, this way reports going back  to  the  landlord, about your desirability as a  tenant,  are more  likely  to  be  positive.  Ideally,  you want  to be in a position where the landlord is chasing you, so express interest in renting the property but don’t be overly enthusiastic. Wait for the landlord to bite, and then say you would seriously consider moving in, if only the rent were a little lower. Make it clear what you are willing to pay, and let the realtor know that you have a good understanding of the current market. Finding  good  tenants  takes  up  a  landlord’s  time  and money, something he will want to avoid. So if you’re sure you want to stay in the area for a long time, you could offer to sign a longer lease  in return  for a rent reduction. Waiving the one-year get-out clause, and offering to stay for two or three years benefits you, too, because the price can’t go up until the lease expires. But before  taking  this  tack,  consider  your  long-term goals.  If the housing market continues to decline, next year you might be in a perfect position to buy a home. The last thing you’d then want is to be locked into a long leasing contract. “It’s a changing market,” says Sage, “and no one is signing long eases. We are seeing prospective tenant’s acting aggressively. They are concerned about job security so they are asking for a six-month break clause,  rather  than  the usual one year. This conditional break clause means you can give notice after six months  if you are  leaving Hong Kong or  if you  lose your  job. Of  course  the  landlords don’t  like  it but  some  are having  to accept it.” Negotiating the terms of a lease is one thing but realtors warn against trying to get out of paying the security deposit (normally wo month’s rent). Ask a  landlord  to  forgo  this charge and he may decide you are a bad bet: someone who will skip town after rashing the apartment. After all would you consider renting out an apartment without a security deposit? Many would-be tenants are now asking for incentives so before you sign a lease, see if the landlord will throw in management bills and utilities.  Let  the  realtor know you are balancing not only the rent of this apartment versus others you’ve looked at, but  the  total expense of  living  there.  It’s also quite normal  to ask  for some minor  renovations, particularly  to  the bathroom and kitchen, and given the current climate you might even get a month or  two rent  free. Sage has  just one word of warning: “When you are negotiating the rent ask for everything upfront,” she says. “It’s a mistake to come to an agreement then go back to the landlord with more demands.” Offering to do some basic maintenance, like painting, is another good way to shave some money off your rent. A landlord might also  agree  to  lower  the  rent  if  you  can  buy  some  essential furniture or appliances yourself, with  the  intention of  leaving them in the property once your contract ends. But with market conditions  as  they  are,  these  kind  of  sweeteners  shouldn’t be necessary. Rather a  landlord may be so eager  to  lock you into a lease, he will throw in not just a new paint job but a new bathroom suite. Looking  forward,  Sage  sees  tenants’  position  only  getting stronger.  “In  the  next  quarter  I  think  we’ll  see  a  lot  more vacancies, so the longer you hang on the better.” Click here for more on home decorating