Key takeaways
- Rent concessions are generally one-time incentives, like three months of free parking, six weeks of free rent, or a waived security deposit
- Concessions can be great for a renter’s budget by reducing short-term housing expenses, but can lead to surprisingly high costs when it comes time to renew
- Landlords are more likely to offer concessions when rents are flat or falling, or when demand is low, to attract tenants without lowering rents
Rents are starting to fall in some pockets around the country, which is good news for renters and a stark contrast from the pandemic-induced record highs. This is because more new apartments continue hitting the market, causing supply to outpace demand. Rents are falling the most in metros that are seeing the biggest gains in supply.
But for landlords, too much supply often results in higher vacancy rates. When this happens, they may offer rent concessions to attract tenants and fill units faster. That’s what’s happening now, and is why more than one-third of landlords offered at least one concession in July. These concessions are designed to make leases more appealing without permanently lowering monthly rents.
Renters may now find themselves in a negotiating position, with opportunities to score a better deal if they know what to look for. But knowing how to spot concessions – and when to take advantage – can be tricky. So what exactly is a rent concession, and how can it benefit you as a renter?
We asked Redfin’s Chief Economist, Daryl Fairweather, to help answer some common questions for renters. Let’s dive in, uncover answers, and learn tips along the way.
What is a rent concession?
A rent concession (also called a lease concession) is a temporary discount or incentive that landlords can offer to make a rental more attractive. “Concessions are a way of sweetening the deal for renters without reducing rent,” says Fairweather. “They might include a free month of rent, waived…