Blog > Limiting Landlords’ Concessions
Landlords offer many kinds of concessions to attract tenants. Free rent and the payment of broker’s fees are often on the table. While concessions can be helpful in gaining tenants, they can also have a negative impact. Offering too many concessions may make a property
look less valuable and a landlord seem desperate. This can be a turnoff to potential tenants, limiting a landlord’s pool of choices. Landlords should look for alternatives to concessions if possible. Lowering the price is a better choice than overusing concessions. While there is a place for concessions, they should be used carefully as they can have unintended consequences.
In the past, concessions like free rent were more helpful when trying to attract tenants. Due to changes on StreetEasy, this is no longer the case. StreetEasy used to show a property’s net effective rent, factoring in concessions. Now, StreetEasy always shows a property’s gross rent, making it harder to see concessions while browsing. This change makes the benefits of concessions harder to see to prospective tenants, lowering the chance that concessions will be effective. Instead, they could make a property look undesirable. Other concessions, like free physical items or subscriptions, have dropped in value during the COVID-19 pandemic. Prospective tenants are more interested in paying a lower rent, thus dropping the rent of a property is more effective than most concessions currently.
The COVID-19 pandemic has greatly harmed the rental market. Forbes stated that in Manhattan, the vacancy rate was 4% in July, the highest in more than a decade. Despite the popular narrative though, not everyone is leaving Manhattan. Landlords are lowering rents for current tenants to encourage them to stay. Lower rents can help stimulate the rental market in Manhattan, opening properties to a larger pool of prospective tenants. We at Link NY Realty are certain that the Manhattan rental market will make a full recovery. Concessions can be helpful during COVID-19 pandemic though.
While concessions can be helpful if used properly, they can also have a detrimental effect on rentals. Concessions can devalue a property and make a landlord look desperate. Additionally, concessions are harder to display on StreetEasy because the website now shows gross rent instead of net effective rent. Despite this, concessions can be helpful for struggling landlords during the COVID-19 pandemic, though lowering rent is a better alternative. Overall, concessions have an important place in the rental market when used correctly and effectively. If you would like to discuss the best way to rent your property, we would be glad to speak with you. Coffee on us.
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Valon Nikci
CEO & Principal Broker | License ID: 10991208180
CEO & Principal Broker License ID: 10991208180