Negotiate your rent in 4 easy steps and potentially save thousands of dollars a year

Here's how to negotiate your rent, from the author of 'I Will Teach You to be Rich'
Here's how to negotiate your rent, from the author of 'I Will Teach You to be Rich'

If you're renting, housing is likely your biggest monthly expense. The average rent for one-bedroom apartments across the country is around $950 a month, and in the country's biggest cities it can be significantly higher than that.

But what if you could bargain with your landlord to get a better deal? Turns out you may well be able to, according to personal finance expert Ramit Sethi.

"The single biggest expense for most people is their rent and yet they never take the time to realize you can negotiate this," Sethi tells CNBC Make It.

And now may be the best time to have that conversation. The national rent index fell slightly month-over-month for the second month in a row, ApartmentList found in its March report.

Sethi, the best-selling author of "I Will Teach You to be Rich," says that, when there's a glut of apartments, you have more opportunity as a renter to bargain. And "if you can negotiate, you can often save hundreds of dollars a month which adds up to thousands of dollars a year," Sethi says.

Here's how to approach this type of conversation in five easy steps.

Step 1: Do your homework

The more you prepare, the better your chances of success. Sethi recommends taking time to pull the current rental data for your local neighborhood so you can get comps. "Go online," he says. "Search for your neighborhood rents. See where it's trending."

Try to find similarly-situated apartments and see what they are going for, as well as what the pricing trend has been in the last year. If it's gone down, you're probably in a better position.

But keep in mind successful negotiations depend on a variety of factors and not everyone will be in the best position to negotiate, Sethi says. For example, ApartmentList found that Las Vegas and Phoenix are experiencing rapid rent price increases. So residents in these metros are probably less likely to get a break.

Sethi says your ability to make this happen also depends on factors such as, what neighborhood you live in, how much you're currently paying and what time of year it is. For example, if you're trying to negotiate a lower rent during the time period between May and September, the most popular months for Americans to move, you may find it more difficult because demand is higher.

That said, Sethi says, it's also important to remember that your landlord can't charge you whatever they want. "They can charge what the market will bear," he says. So if you're paying more than what similar apartments are going for, you have a better shot at negotiating your rent down.

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Self-made millionaire: Don't buy a house before you ask yourself this question

Step 2: Start early

When it comes to talking with your landlord, timing matters. Sethi recommends beginning any kind of rent negotiation conversations about two months before your lease is up. Because if your landlord says he or she will not reduce your rent, you then have a decision to make.

"Do you want to stay and basically eat it or do you want to move out?" Sethi says. By starting the negotiations before your lease is up, you'll be able to give yourself some time to sort out the best option for you.

Step 3: Play up your strengths

After you have a good idea on where the local rent market stands, you're ready to start negotiating. Here's how it works, Sethi says. You go into your landlord and you say, "Based on the data, it appears that apartments in this neighborhood are trending down by 6 percent (or whatever you've discovered about your current neighborhood)."

Then make sure to note that you've been a good tenant so far.

"I've been here for X years and I plan to be here for many years more," Sethi suggests you could say. "I never cause unnecessary problems or damage. I'd like to negotiate for a lower rent."

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Kevin O'Leary: Negotiate any circumstance — from your cable bill to your salary

Step 4: Use potential costs as a bargaining chip

"You need to know where your landlord is coming from," Sethi says. If you move out, he or she will likely have to scramble to find another tenant. And your landlord may also have to invest in repairing that apartment, which could cost them thousands.

It is cheaper for them to have you stay put.

Sethi recommends leveraging this in your conversations. "Say, 'Look, I could leave tomorrow and you'd have to come in and repair all the stuff that's going to cost you a ton of money. Or instead, you can lower my rent by what the market is currently bearing and I'll be a great tenant as I've already been a great tenant.'"

Your landlord may refuse. "It won't always work," Sethi says. "Sometimes your landlord will flatly say no. That's fine. But when it does work, it works big."

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Ramit Sethi: If you want to build wealth, saving your money isn't enough
Ramit Sethi: If you want to build wealth, saving money isn't enough