9 Rent Incentive Ideas That Won’t Break Your Bank as a Landlord

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It’s hard to make sense of the real estate market right now. The rising interest rates that began in 2022 have made mortgages more expensive. And yet home prices in most markets continued to rise, and rents along with them, as demand for homes remained strong into 2023.

Turns out people need places to live even when interest rates go up. Go figure.

Now, though, we’re starting to see rent growth slow and even dipping in some markets. With the rental market nationwide cooling, landlords may need to work a bit harder to attract and retain the best tenants.

But that doesn’t mean you should have to capitulate on your rental prices in a race to the bottom that eats into your profitability. Many landlords instead rely on lease incentives to win over potential tenants, offering renters flexibility and perks while maintaining a healthy return on investment.

To sweeten your offer, try these nine cost-effective ideas for rent incentives to help you attract quality tenants without breaking the bank.

 

What Are Rent Incentives?

Landlords or real estate owners offer rent incentives, also known as rental concessions or lease incentives, to attract tenants and encourage them to lease a property. These incentives make the property more appealing and competitive in the rental market, enticing potential tenants to choose your particular property over other comparable options.

Rent incentives can benefit both landlords and tenants. Landlords benefit by attracting a larger pool of potential tenants, reducing vacancy periods, and maintaining steady rental cash flow. Tenants can enjoy cost savings, added convenience, and increased value for their rental experience.

Rent incentives play a crucial role in a competitive rental market where tenants have numerous options to choose from. By offering attractive incentives, landlords can differentiate their properties and attract desirable tenants, leading to increased occupancy rates and higher satisfaction among existing tenants.

Common rent incentives include discounts, cash incentives, free amenities, flexible lease terms, or additional services. But some of these types of incentives benefit property owners more than others, and some can get pretty expensive. Let’s zero in on some ideas for incentives that won’t cut too deeply into your returns as a real estate investor.

 

9 Best Lease Incentive Ideas

The best rent incentives for landlords are those that effectively attract renters without costing you a huge sum in direct expenses or in lost revenue. I mean, sure, if you’re desperate to fill a vacancy, you could offer a month’s rent free or a huge rent discount. That would definitely incentivize renters, but it’d take a huge chunk of change directly out of your bottom line.

We can do better.

There are more cost-effective alternatives that add value to tenants without picking your pocket. The rent incentive ideas below attract potential renters without cutting so deeply into your returns.

 

1. Offer Flexible Lease Terms

Consider offering flexible lease terms to accommodate tenants’ individual needs. This can include short-term leases or month-to-month agreements, which appeal to tenants with uncertain future plans or those who prefer shorter commitments. Or you can go the other way and offer extended lease periods with marginally discounted rent. Providing flexibility can attract a broader range of tenants.

Unlike most of the other ideas on this list, however, shorter- or longer-term leases can be double-edged swords. Short-term lease agreements can result in more frequent turnover, which carries extra costs. And offering extended leases at a discounted rate can lock you into accepting lower rent payments for longer than you might like—especially given today’s elevated inflation rates.

 

2. Include a Utility Package

Include utilities such as electricity, water and sewage, or cable and internet packages as part of the monthly rent. This can alleviate the burden of tenants having to set up and manage multiple utility accounts, making your property more appealing. You can negotiate bulk rates with utility providers to reduce costs and still offer an attractive package to tenants.

This incentive works best with utilities that aren’t metered or dependent on the tenants’ rate of usage. For example, if tenants aren’t paying for their own electricity and decide to set their thermostats to 60 degrees all summer, you could end up with a surprise bill. But other utilities like trash collection, landline telephone service, and basic cable TV carry flat and predictable costs regardless of how much your tenants use them.



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