Rental Concessions to Attract Tenants
By Sadiya Anjum
Rental Concessions are benefits that are offered by the landlord to his tenants. Concessions are usually offered to draw tenants to vacant properties. Some other landlords may choose to offer a concession if the tenant decides to renew the lease. Even when the landlord is planning to sell a home, in return for his tenantsí co-operation he may offer incentives or concessions.
Offering concessions depends largely on the market condition. But for some landlords, other undesirable factors related to a property will have to be remedied with a rental concession. If the property is located in a disagreeable neighborhood, the landlord may not be able to fix this problem. But he can offer concessions to attract renters who may otherwise not come.
The most common form of rental concession is to reduce the rent. But there are several other forms of concessions. Landlords may offer moving allowance, signage for commercial properties and a higher allowance for tenant improvement projects or amenity upgrades. Some may reduce the security from a whole monthís rent to a relatively small amount. Facilities which require a fee, such as a laundry unit, internet facility, garage parking etc. may be chopped off. This will attract those renters who require such facilities.
As mentioned before, reduction in rent is one of the most common concessions offered. Offering a rental rate which is lower than the market rate is one way of doing it. One may even offer a few weeks free rent if the tenant signs a lease for six months or a year. Alternatively, the landlord may distribute the rent reduction over a certain period of time or even over the life of the lease. This will only work for renters who are planning to stay long term.
A landlord may choose any kind of concessions he may want to offer. No one method is graded as the best. It may depend on whether the renters are there on a short-term or long-term basis. The landlord has to decide which concession will suit his situation. Sometimes sacrifices have to be made; offering concessions may mean lower income or money spent out of the landlordís pocket. But it also means that the property will not be vacant anymore.
Concessions are a great marketing strategy as the renter may feel like the offer is a bargain. But concessions do not necessarily last forever. Most often, after a period of paying lower rent, the renter will have to start paying the full amount. The concession will not even be applicable when the lease is renewed, unless the landlord agrees otherwise. But rental concessions are primarily employed to attract tenants. Once this task is accomplished, the landlord has to focus on doing his duties well so he can retain his tenants.
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