When people rent apartments or houses, they tend to go with landlords who offer them a compromise on the rent or the amenities for a time. Attracting tenants is the goal. Offering them savings is how to attract them.
Landlords understand the costs of moving. They understand that a discount here or there is a relief. However, landlords should also understand the advantages and disadvantages of offering rent concessions.
Kinds Of Rent Concessions
Landlords offer everything from a free month’s rent to prorating the first month’s rent:
- Sometimes it’s discounted rent for a year
- It could be a discounted security deposit
- Some landlords waive fees such as pet fees
- Some pay for moving costs.
Landlords have the option of offering amenities for free such as laundry or storage, they could allow tenants to paint one or two walls, or they could offer new appliances, or update the décor.
Pros Of Rent Concessions
The number one advantage of rent concessions is the filling of landlords’ properties faster. Other potential tenants will see this and move in, thus filling vacancies and adding profits. Landlords with competition, stiff or otherwise, can offer thoughtful incentives to potential tenants, making the landlords look good and stand out from the competition.
Landlords always want current tenants with good renting habits like on-time payments to re-sign their leases. Offering such tenants rent concessions means that they frequently re-up their leases. This type of concession makes sense because it secures the landlords’ profits for another year.
Cons Of Rent Concessions
Renters offered free parking, storage, or use of the laundry room will recognize that they have to pay for these things when the lease is up. They might not re-up their lease. Landlords will then have the expense of getting new tenants for their properties.
Another disadvantage of rent concessions is they attract less than desirable renters looking for freebies. These renters often do a midnight flit, leaving the landlord holding the bag. Landlords offering a discounted security deposit might rue that day if the former tenant trashed the place.
Landlords offering discounted rent will serve the tenant’s notice of a rent increase the second year. These tenants might not renew their lease, leaving landlords to go through all the expenses of renting the apartment again.