Rent incentives are back, and tenants can find them in cities across the country.
Many Seattle landlords currently are offering six weeks free rent. New York City tenants can expect two free months. Same in Philadelphia and Boston.
Washington, D.C. landlords are competing with less cash at move in, eight weeks of free rent on one-bedroom apartments, and three free months on other units.
Likewise, Kansas City, Missouri leasing incentives include the current month free or as much as $500 cash off at move in. Those incentives are being offered on apartments averaging $995 per month.
Denver landlords are offering six weeks off one-bedroom units that rent for around $1,400 monthly. Las Vegas tenants are receiving four free weeks and COVID-complaint virtual tours.
Even Boulder, Colorado, a college town where rent per square foot is among the highest in the country, is seeing one to two months free rent now that students are attending classes remotely. These same landlords also are renting out available storage spaces.
Most experts agree that these numbers point to a migration of tenants from expensive downtown units to suburbia. The most likely reason for the shift is the inability to enjoy all the city has to offer in terms of bars, restaurants, museums, and mass transit. Why pay the price when you can’t enjoy the perks?
Unemployment also plays a major role because many tenants no longer need to be close to work. But landlords with downtown properties shouldn’t panic. So far, this migration is more of a trickle than an exodus, and there is reason to believe that city properties will reclaim their luster later in the year.
Some major property managers are skipping the rent reductions and creating lease incentives tied to lifestyle. Perhaps the most creative is gifting in-suite exercise equipment to tenants who cannot access community fitness centers and gyms.
Other examples include offering free parking and allowing pets or waiving pet fees. Gift cards also are popular. The beauty of these incentives is that the perceived value may be greater than the out-of-pocket cost.
Most of these rent incentive offers are tied to signing a long-term lease — more than 12 months.
But there is one downside: rent incentives can encourage tenants who otherwise can’t afford the unit to apply in the hope their income will grow in the coming months.
Other landlords may want to run the numbers to determine if a lease incentive saves over the cost of potential vacancies in 2021.
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Disclaimer: The information provided in this post is not intended to be construed as legal advice, nor should it be considered a substitute for obtaining individual legal counsel or consulting your local, state, federal or provincial tenancy laws.