What Are Rent Concessions?
Everyone loves seeing a product on sale, or offered at a good price. Just like consumer items, apartments also offer deals. Real estate professionals call these concessions, and they come in a variety of types.
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Rent Concessions
Sometimes apartment buildings will offer a rent concession, usually ranging from 2 weeks to 3 months free rent. In some cases, they will allow applicants to prorate the concession, essentially spreading the discount out across the months their new lease covers (more on that in the next section).
Sign-a-Longer-Lease Concessions
Some apartments will offer reduced rent prices if an applicant signs a longer-term lease. In most cases, the longer the lease, the better the concession.
Unit-Type Concessions
In addition to lease length, deals can depend on the type of units available. For instance, Leasing offices will sometimes offer concessions on 1 bedrooms or studios only. If an apartment building has a large supply of 1-bedrooms units, they will most likely apply concessions to them.
Look-and-Lease Rent Concessions
A ‘look and lease’ concession is an extremely popular type of deal in which, if a renter applies for the unit within 24 to 48 hours of a tour, the leasing office will waive the admin and application fee. These fees can be expensive, so it’s worth inquiring about. Sometimes a building might also waive other fees, such as pet fees and/or moving fees.
Other Concessions
Other unique concessions sometimes pop up, such as allowing a tenant to paint the walls or switch out carpet for hardwood flooring.
Pro tip: Always inquire about concessions because buildings don’t always list them on their websites.
Before you begin your apartment search, know your budget. Read, How Much Should I spend on Rent? Then, if this is your first time renting, learn how to budget after college, and find some tips for first-time renters.
Ways To Take Advantage of Concessions
To Prorate or Not to Prorate?
When a building offers a rent concession, ask whether the credit applies to a specific month or can spread across the lease. In a hypothetical 12-month lease at $1,500 base rent with one month of base rent waived, total base rent equals $16,500. The average equals $1,375 per month, but that average alone does not tell you each payment’s amount or due date.
Ask the leasing office for the actual payment schedule before applying. Confirm which month receives the credit, whether spreading it across payments is permitted, and which fees remain payable during the credited month. Follow the written agreement rather than assuming the advertised average equals your monthly bill.
Doing the Math
For that hypothetical offer, net effective base rent equals $1,375 per month. If the property applies the entire $1,500 credit to one month, the other 11 months still require $1,500 in base rent. If the written agreement instead permits equal payments across all 12 months, the base-rent portion could equal $1,375 monthly. Additional charges remain separate.
Calculate average base rent after a concession as: [(monthly base rent × lease months) − total base-rent credits] ÷ lease months. For this example: [($1,500 × 12) − $1,500] ÷ 12 = $1,375. This calculation averages the discount; it does not change the lease’s payment schedule.
You can set aside money from a credited month to help budget for later payments. However, a personal budgeting method does not authorize smaller payments to the property. Confirm the amount actually due each month, and avoid subtracting a concession twice if a quote already includes it.
What Should a Written Concession Breakdown Include?
| Detail | Question to ask |
|---|---|
| Base rent and term | What is the rent before discounts, and how many months does the lease cover? |
| Credit and eligibility | What is the dollar value, which unit qualifies, and what deadlines apply? |
| Payment timing | When will credits post, and what will I actually pay each month? |
| Other charges | Which mandatory fees and selected extras remain payable? |
| Conditions | Does the concession agreement require repayment in any circumstances? |
| After the promotion | What base rent applies after the credit ends? What renewal terms, if any, are confirmed? |
The FTC recommends getting additional rental fees confirmed in writing. At AptAmigo, we encourage renters to compare the full written offer before choosing a special. Bring your questions to your locator and the leasing office, then use our apartment comparison checklist to track the answers.
Rent Concession Trends
Coronavirus
Concessions reached an all-time high during the Coronavirus outbreak. Apartments use concessions when demand is low to incentivize people to act. Just like in the consumer world where sales inspire people to buy products, concessions in real estate lead to a higher number of closed deals.
During the Covid crisis, many people left big cities, such as Chicago and New York City, because they no longer needed to work on-site. Working remotely allowed people to move farther from their cities and ultimately pay cheaper rent.
Because of this effect, apartments in cities found themselves dealing with a lot of vacancies. To fill those empty units, many of them offered great concessions, up to 3 months of free rent. Once the apartments started regaining occupancy, concessions slowed.
Seasonality
Because the demand for rentals decreases during the winter months, rent prices usually drop and concessions pop up more often. To save the most money, perform your apartment search in winter.
As peak real estate season settles in during the summer months, rent prices rise and the number of concessions available decrease. However, look-and-lease concessions tend to happen year round, so if you find yourself apartment hunting over the summer, it never hurts to ask a leasing office whether they are offering any concessions.
Time to Move? We’ll Find the Best Rent Concessions for You.
Now that you know how to save money with rent concessions, let AptAmigo help you find the perfect apartment. We’ll put together a list with your budget and preferences in mind and schedule your tours for you. Best of all, it’s free!
Up Next: Why Do Millennials & Gen Z Rent for Longer?
* The original version of this article was first published on September 22, 2021.
Jake Vanvalkenburg was a Touring Agent at AptAmigo, where he helped clients choose their next dream apartment.
