When attempting to lease out your property, you may want to consider offering rental concessions to attract occupants quicker. One of the most popular rental concessions is lowering the monthly rent for a set number of months. In some cases, rent is lowered for the entire lease term.
If you’re wondering how lowering the monthly rent will affect your bottom line, check out this list of pros and cons to consider:
Easier to market
Offering a rental concession that will put money back in the tenant’s pocket always attracts attention. Marketing your rental, including any discounts and deals, via the proper channels is essential to renting your property for the most money in the shortest amount of time.
Attract more potential tenants
By lowering your monthly rental rate versus just offering free rent for a month, your property will show up in more search results when filtered by price. This means more potential tenants will see your property, more people will contact you, and your property will be occupied faster.
An empty property is a money drain, eating away at any profits you are making on other properties, or in the worst-case scenario, using up your savings. By lowering the rent and getting your property in front of more eyes, you won’t be losing money every month due to vacant spaces.
It should be no surprise that lowering your monthly rental rate will decrease your overall monthly revenue. However, when compared to the possibility of an unoccupied space, the decrease in revenue caused by this rental concession is usually less than losing months of rent.
Difficult to scale up
If a tenant is offered a lowered monthly rental rate for their entire lease term, but the discount halts when their current lease ends, you may have some issues with tenants choosing not to renew their lease. This is because you may need to increase the base rent due to inflation or other increased expenses. However, adding this increase and the loss of a discount together may make the new rent amount too much higher for the tenant to renew.
If you need help with your rental property, trust the property management experts at Douglas Realty Property Management to pull out all the stops when putting your rental on the market. We’ll make sure to offer the right combination of concessions, amenities, and customer service so your tenants are always satisfied. Call (239) 542-6906 or contact us online to find out how we can help you today!