Attracting Tenants through Rental Concessions
A rental concession is when a landlord compromise on the original rent to get a tenant to move in quickly. They are a kind of a rebate offered to a tenant to get them into a rental property quickly. It could be in the form of monetary compensation, a service, physical good or a discount.
The reasoning behind a concession is that its value is significantly less than the cost of getting a tenant to move in quickly, and it thus helps the landlord avoid a vacancy alongside vacancy costs. A concession will also save you additional costs such as marketing costs or on utilities like heating in the unit.
The Common Rental Concessions
There is no end to examples of rental concessions you can give out. Here are some of the most common concessions:
• Rent-free Month
In this concession, the landlord offers the tenant a month free of rent. This happens during the lease contract’s final month as the landlord tries to keep the tenant from moving out. For an annual lease, the tenant would foot the normal rent for the initial 11 months and in the last month, pay nothing. However, when the lease is over, the tenant would have to pay for the full sum every month once renewed.
• Reduced Rent
Instead of scrapping away the rent, the landlord can choose to grant a rental discount to the tenant. He could, for example, offer to reduce the monthly rent if a tenant consents to move into an apartment before a specific day. For an annual lease, the tenant would pay a subsidized rent for all the months.
• Slashed Security Deposit
Another option is for the landlord to slash the amount paid for the security deposit. Instead of the tenant paying a month and a half worth of rent, the landlord could opt to collect a month’s rent. So if the tenant is to pay $1000 for rent, the landlord would receive $1000 as the security deposit as opposed to $1500.
• Moving Costs
A landlord could also lend a hand to the tenant when moving into the rentals by covering their costs. This could be in the form of paying for the moving truck, moving company or a storage locker.
• Upgrades in the apartments
A landlord could reach out to a tenant by promising to upgrade their rental unit. It doesn’t even have to be costly. A minor upgrade like a newly tiled floor, new countertop, new appliance or new vanity should do it.
• Covering broker’s fee
If your property is listed under a Realtor, the tenant has to meet the broker’s fee. However, if you want the tenant to move in quickly into the rental, you can choose to pay the fee on their behalf.
• Good
In this concession, the landlord entices a tenant by offering them a good, such as a free carpet.
• Service
Instead of a good, the landlord could instead provide a service to the tenant, such as free cable.
• Free Amenities
If your apartment boasts of amenities such as parking space, a gym, laundry, pool, storage unit or tennis court, and which would require the tenant to part with a fee, the landlord can give this amenity for free to the tenant as their version of rental concession.
It is costly when any of your units are vacant. You still have to pay the taxes and utilities. Additionally, there are marketing costs that you have to meet. By offering a rental concession, you could say goodbye to all this. Also, if you are looking to have your property managed, look no further. At lapmg, we offer property management services and leave you to other pursuits. Check us out here.
