As we enter the holiday season, landlords face the most challenging leasing environment of the year. With rental demand falling to annual lows, vacancies are a real threat to your bottom line. That's where lease concessions come in.
Industry data from Zillow shows rental concessions are on the rise, with 37.7% of all listings offering deals, up 25% from last year. In competitive markets such as Austin, TX, up to half of listings are advertising concessions. As real estate experts, we know this isn't a gimmick - it's a strategic necessity.
Why? Because every month of vacancy costs you dearly in lost rental income. Offering a one-time concession, such as $200 off the first month's rent or 2 weeks free on a 12-month lease, pales in comparison to leaving a unit vacant for months. Consider this:
- A unit renting for $2,000/month left vacant for just one month = $2,000 lost
- That same unit vacant for 2 months = $4,000 lost
- Offering 2 weeks free on a 12-month lease at $2,000/month = $1,000 "cost"
The math is simple: Investing $200 to $1,000 in concessions up front to fill a vacancy quickly is better than risking thousands in losses later. Plus, occupied units are better maintained and less prone to issues like squatting and vandalism that can increase in the winter months.
Of course, all concessions are not created equal. Doorstead is happy to work with all our property owners to craft a concession package that is competitive for your market and unit type. We have an experienced leasing and pricing team ready to provide invaluable insights.
In conclusion, offering a lease concession is not a loss - it's a smart, proactive strategy to minimize costly vacancies and protect your property in a challenging winter rental market. By providing a compelling but prudent incentive, you can attract qualified tenants quickly and maintain strong cash flow through the holidays and beyond.
As always, feel free to reach out for a free consultation on navigating today's rental market. Our team is here to help you maximize your property's performance in any season.