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Should you use a rent concession to Attract new tenants in 2024?

Using a rent concession can be a strategic tool to attract new tenants, but it comes with both advantages and potential drawbacks. Here are some considerations:




Attractiveness to Tenants: Rent concessions, such as offering a discounted rate for the first month or providing a few months of free rent, can make your property more appealing to potential tenants. This may help you stand out in a competitive rental market.


Faster Occupancy: A rent concession can motivate tenants to sign a lease quickly, leading to faster occupancy of your property. This can be beneficial, especially if you're looking to minimize vacancy periods.


Competitive Edge: In a market where, other landlords are offering similar concessions, providing one can give you a competitive edge and increase your chances of securing tenants.




Lower Rental Income: Offering a rent concession means you'll receive less rental income during the concession period. This reduction in revenue should be factored into your overall financial planning.


Tenant Expectations: Tenants may come to expect concessions, and if the market is competitive, they might choose properties based solely on the concessions offered rather than the overall value or quality of the property.


Risk of Attracting Short-Term Tenants: Some tenants may be attracted to your property solely because of the initial concession. This could result in a higher turnover rate if they are not committed to staying long-term.


Potential Effect on Property Value: If concessions become a common practice in a particular market, it could impact property values negatively, as appraisers may take these concessions into account when assessing the property's worth.




Market Conditions: Assess the current rental market conditions in your area. If it's a highly competitive market with a surplus of available properties, offering a concession may be more beneficial.


Financial Impact: Evaluate the financial implications of offering a concession. Ensure that you can absorb the temporary reduction in rental income and that it aligns with your overall investment strategy.


Lease Terms: Clearly outline the terms of the concession in the lease agreement, specifying when it applies and for how long. This can help manage tenant expectations and avoid misunderstandings.


Ultimately, whether to use a rent concession depends on your specific circumstances, market conditions, and overall business strategy. It can be a useful tool when used strategically, but careful consideration and planning are essential.


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At GoldenWest Management, our property management team saves owners hundreds of hours per year and the hassle of managing their clients’ rental properties.


To learn more about the services that we can offer you, contact us today by calling (866) 545-5303 or click here to connect with us online.