When it comes to housing, just about everything is negotiable. This may seem more obvious when navigating a home purchase, but don’t sell yourself short as you search for a new apartment. You just have to know what to look for and what to ask.
A rent concession is a reduction in price, rebate or allowance meant to ease the renter's financial burden, and it is often used to sweeten the deal to tip the scales in favor of one apartment community over another.
Property managers and landlords offer concessions in a variety of ways – from a free month's rent to a discount on community amenities fees. This often depends on the community, current competition in the local market and what may be a better incentive for renters.
Many apartment communities promote limited-time specials on their website, as well as rental listing websites such as Apartments.com or HotPads. But as you peruse available floor plans and reach out to leasing agents for a tour, it never hurts to ask for available concessions.
“It’s not wrong for a prospect to ask,” says Mary Gwyn, owner and chief innovator of Apartment Dynamics, a property management firm that also trains other companies on property management practices.
Certain concessions may be particularly beneficial for a new tenant but cause little loss to the landlord, including waiving or discounting the security deposit once the background check is complete, Gwyn says. In the case of a tenant with pristine credit and an excellent renting background, reducing the upfront costs on a new apartment can be a big perk, while being “not much skin off a landlord[‘s nose] if they’ve properly vetted out a prospect,” she says.
Here are seven concessions apartment communities commonly offer:
- Free rent – typically one to three months
- Reduced rent for a few months or length of lease
- Waived or reduced security deposit
- Waived or reduced amenities fee
- Paid moving expenses
- Owner- or landlord-paid broker fee (in instances when the tenant is represented by an agent)
- Free TV or VISA/Mastercard gift card
Concessions and discounts for rental properties must follow the Fair Housing Act, which prohibits discrimination in housing based on race, color, national origin, religion, sex, disability or family status. This means property managers or landlords must offer the same discounts or concessions to everyone and properly document deals if they’re offered for a limited period of time – a specific day or long weekend, for example.
Is Everyone Offering Deals?
While concessions are a nice bonus, don't expect to find them everywhere you look. Gwyn says Apartment Dynamics tries to avoid using concessions and discourages other property managers from doing so as well. When the focus is on concessions, Gwyn says, “Instead of selling product, our industry is selling price.”
In Douglas Elliman Real Estate’s report on rentals in Manhattan, Brooklyn and Queens, New York, for September 2016, just over 15 percent of new leases in Manhattan included concessions, up from 8.7 percent a year earlier. In Brooklyn, 8.9 percent of new leases had concessions this September, up from 6.1 percent a year before.
While the share of new leases with concessions isn't the norm, they are becoming more common. An influx of rental inventory is one factor that's making them more popular. In Manhattan, apartment listing inventory rose by nearly 2,000 units from September 2015 to September 2016. Brooklyn increased by just under 600 units in the same time period, according to the Elliman report.
But new inventory is not the only thing influencing renters. Like most of the country, New York's rental market is affected by the season, when demand tends to peak in late summer and starts dropping off leading into fall and the winter holidays. In addition, the job market and political atmosphere, including the upcoming presidential election, can skew rental trends one way or another, says Hal Gavzie, executive manager of leasing at Douglas Elliman.
To determine when a concession such as reduced rent or an owner-paid broker fee would be most fruitful, Gavzie says it’s a matter of landlords and property managers knowing what’s going on in the market at the moment, “based on the market and what their customers are saying, what other brokers are saying and what the competition is doing.”
In smaller metropolitan market Grand Rapids, Michigan, property management company Rental Property Consultants doesn’t use concessions or specials to draw in prospective tenants, according to Jason Johnston, a Realtor and marketing manager at the company.
“Our vacancy rate is probably 30 days, if that. I think our advantage on that is location and price,” he says.
Rental Property Consultants primarily rents out single-family homes and multiplexes, but its larger apartment community is located well in the metro area and strategically priced to keep vacancy low and draw tenant interest, Johnston says.
Since lease concessions aren't a guarantee in many markets, it's best to approach your next apartment search by budgeting based on the prices presented, with specials only offered as a potential perk. If you're torn between two communities, explain your dilemma to the leasing agent, and he or she may be able to offer concessions that aren't advertised to make the difference.
What Could You Ask About Instead?
You can always inquire about discounts or specials, especially when you know the upfront costs of hiring movers, starting up utilities and paying a security deposit or amenities fee can be a shock to your bank account. A couple hundred dollars from your new apartment community to cover moving expenses could be a big help.
But if you’re looking for something to help make one community stand out against another, you could go another route.
As a way to appeal renters on the fence, Gwyn often recommends that property managers upgrade in apartment units rather than offer a discount.
“There’s so much [property managers] could do, anything from a smart thermostat or an accent wall [to] upgraded lighting and plumbing fixtures," she says.
It doesn’t necessarily lower your monthly rental rate – though a smart thermostat may reduce heating and cooling costs – but the upgrades may give you a unit that would have been out of your price range otherwise.
And as Gwyn points out, it serves as a solid investment for the landlord and may make them more inclined to add to the apartment than discount costs. Gwyn adds: “[It’s] something that customizes their apartment and adds value to my product – because I’m reinvesting in them living there but also the product itself.”
She has appeared in media interviews across the U.S. including National Public Radio, WTOP (Washington, D.C.) and KOH (Reno, Nevada) and various print publications, as well as having served on panels discussing real estate development, city planning policy and homebuilding.
Previously, she served as a researcher of commercial real estate transactions and information, and is currently a member of the National Association of Real Estate Editors. Thorsby studied Political Science at the University of Michigan, where she also served as a news reporter and editor for the student newspaper The Michigan Daily. Follow her on Twitter or write to her at email@example.com.