Do you have a property that’s sitting empty, that you just can’t seem to find a tenant for? If so, you’re not alone. Nationally, about 4.8% of apartments sit empty, and when your property is empty, you’re losing money. You need to get someone into your vacant properties – and fast.
One solution that can push potential tenants to lease on the spot is offering concessions, a practice that ranges from offering a small rent reduction to upgrades and community-based perks, and the practice is growing in importance. According to industry experts, increased supply, particularly in the luxury home sector, means that potential tenants have their pick of countless great properties. Offering concessions can help you close the deal, and they’re an especially valuable tool for getting top tenants into your vacant properties. And when you think outside the box to show you appreciate their business, you show your star landlord status.
Here are a few ideas for unique concessions to get you started.
The Basics: Price Cuts
The most basic type of rental concession is also the most generic: a cost reduction. Though the amount depends on the market, a common offer is a free month of rent or reduced rent for the length of the lease. Are rental concessions a loss? Sure. But so is an empty apartment and when you treat tenants well from the start, they’re more likely to renew their lease, cutting your financial losses down the line.
Ditch The Fees
If dropping a month’s rent seems like a lot, another popular way to attract great tenants is by eliminating upfront fees. Do you normally charge for a parking pass, require an application fee, or ask for a pet deposit? Dispense with any or all of these to demonstrate to potential tenants that you’re serious about getting them into your space. Those little fees can add up quickly when tenants are already facing the financial stress associated with moving, but they’re not nearly so important on your end of the exchange.
Add On Amenities
Top apartment buildings are often equipped with an in-house gym, pool, or other significant amenities that make them appealing, but if your apartment lacks these features, you can make up for them via concessions. Locate a great fitness center in your area and partner with them to offer special memberships to your tenants or simply swallow the cost of a gym membership. The more you can build valuable community connections that you can leverage as part of both normal marketing and concessions, though, the better positioned you’ll be as you work to attract new tenants.
The Interior Upgrade
Property upgrades tend to happen piecemeal, a little at a time during vacancies and when you, as a landlord, can afford them. When trying to move an empty apartment, though, promising a key upgrade, such as installing newer appliances or adding a dishwasher to an apartment that doesn’t have one. Tenants love the polish that new appliances add to a property, as well as the convenience of having a dishwasher or an in-unit washer-dryer, and you’ll be left with a property that’s increased in value, even after those tenants depart.
If the property in question isn’t due for new appliances, other upgrades you can offer include landscaping improvements like installing a patio, new window treatments, or smart home technology. The goal is to make the entire property more valuable while also pampering the new tenants a bit.
Be Family Friendly
If you’re trying to move a family with children into your property, then you have countless additional options for concessions. For families with especially young children, for example, one of the most stressful things about moving can be finding childcare. If you can guarantee them a daycare spot, that can be a gamechanger, especially if they’ve struggled with daycare waiting lists in the past.
Another concession popular with families with children, include memberships to local children’s museums, the zoo, and similar community programs. An upgraded, multi-age play space, extra parking spots with room for unloading strollers and car seats, and safety improvements, such as offering to anchor furniture or installing better lighting and fences, can also prove your commitment to tenants with children.
Concessions In The Renewal Period
Though concessions are usually used to bring in new tenants, they’re also useful if you’re trying to keep existing tenants from moving out. Especially if you have a great tenant who you’ve built a positive relationship with, offering some type of special deal or upgrade can ensure that they remain with you in the coming year. For those renewing their lease, you might consider offering service-based incentives, such as biweekly cleaning services or gift cards for local restaurants and shops. When working with existing tenants, concessions are less about closing the deal and more about thanking them for their loyalty.
The Rise In Concessions
While concessions aren’t necessary, particularly if you rarely have vacancies in your properties or if your area is in high demand, they are on the rise, especially in big cities. About 15% of new leases in Manhattan include concessions, while Brooklyn’s rate is only about 9%, despite being in the same city. Houston, though, outpaces even Manhattan; here in Houston, a third of apartments are offering concession to tenants, making it one of the most saturated markets in the country when it comes to perks. Even if you’re not a new construction or struggling to fill your vacancies, it can be hard to navigate the market without offering some little extras as a sign of goodwill and to keep up with your competition.
If you’re not sure how to navigate the real estate market with the added confusion of concessions, don’t worry – Green Residential is here to help. We know the Houston real estate market inside and out, and that means fewer vacancies for you. Contact us today to learn more about our property management services. Every minute your property sits empty, you’re losing money. Don’t let those rent checks slip through your fingers.