One way to avoid vacant properties and attract more tenants is to offer rental concessions. In some cases, concessions are also offered by landlords to tenants when it is time for them to renew their lease. Rental concessions can even be used by landlords as a way to compensate tenants for problems that cannot be changed. These can range from the neighborhood in which the property is located to a lack of nearby amenities.
A variety of different rental concessions can be offered depending on the situation. Although these can sometimes mean lower income for the landlord, it is better than the alternative, which is the property standing vacant and not bringing in any money.
Free month’s rent concession
A free month is one of the most common rent concessions to offer potential tenants. One way to do this is to amortize the cost of the free month over a 12-month period. This means that tenants will pay slightly less per month than what the gross rent would have been.
Alternatively, the free month can be added on to the beginning or end of the lease while the tenant continues to pay the gross rent during all of the other months. Adding the free month at the end of the lease will also help to safeguard you somewhat against the lease being broken early. A free month is also safer than offering a reduced security deposit because a tenant could damage the property and then disappear before the lease is up.
If your property has any optional amenities, such as garage parking, washers or dryers in the unit or other extras, these can be leveraged as rental concessions. Free use of a fitness center, if available, also makes for a good rental concession.
In reality, not many tenants opt for paid amenities, so including some as rental concessions can serve to draw in renters without making a dent in your rental income.
Offering smaller renovations such as refinished floors or new appliances as rental concessions enables you to entice renters without sacrificing rental income. While it does cost you a bit more upfront, the renovations will also increase the rental value of the property, which is beneficial in the long run.
No need to break the bank
Bear in mind that depending on the type of property and its location, there is no need to go overboard with concessions. Some renters are happy with a gift card or gift certificate, so use good judgment when deciding what to offer and don’t put yourself at a disadvantage.
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