As winter is approaching here in northern Wisconsin I have 3 units vacant. Is it permitted to offer incentives, like a free TV for first qualifying tenant, cash back on first month's rent etc. Any advice on how to attract more eye balls.
I would offer a free first month rent with a 13 month lease. Yes you're losing income on the "free month" but you're also getting the full year of income. I would also write it in such a way that if the terms of the lease contract are violated/terminated that they will be repaying the concession of the free month. Some times people need to be made to feel like they're getting something free or a good deal. You could offer to move in with just your security deposit as well.
Supply, demand and price. If it's not rented, drop the price. Department stores do it, landlords do it, it's the process of operating a business. Sometimes you can pull off a discount for x number of months, bottom line is price will get people in the door. Everything else reads as a gimmick and negotiating price is a universal language that is very easy to explain to a tenant. Trying to explain the gimmick is more challenging.
@Mario Alexandrou here are some ideas:
1. Offer a rent discount with 18 month lease. For example offer the property for rent at $1250 for the first 9 months and $1350 for the second 9 months. Or if they want a 12 month lease, just say the price is $1350. When you list the property, put the price at $1250, then detail in the description that the price is part of an 18 month lease special. I like this promotion because the advertised move-in price is lower. It also puts the next lease renewal in the summer when you can get higher rents in the future.
2. Offer a discount on security deposit and say something like qualified applicants pay only $500 deposit. The lower upfront costs help them get into the property. The nice thing about discounting deposit versus rent is that you get to keep rent. Disadvantage could be less "carrot" incentive at the end to leave the place in great condition, but if the applicants are vetted, they will take care of it regardless. This is nice because not everyone has lots of cash on hand to pay rent at their current place and deposit/rent on a new place.
3. Offer November (or current month) free. The tenant is required to pay security deposit and December rent before taking possession. The first month starts immediately after accepting application and getting their money. This allows the tenant to start moving stuff in and allows you to pass over the utilities right away. You may miss out on a little rent for November, but the point is to get people into the property before the dead zone. Dead zone is between Thanksgiving and Christmas, when hardly anyone wants to move.
Great thread topic. I am looking forward to other responses.
ONe thing I have learned is to write leases so they don't expire this time of year.. its a killer..
for whatever reason everyone has this fobia about the holidays even though that's simply 2 day out of the year.. its like they take 2 months and think they can't move for these months.. we are coming up on that time.. were U get the I can't move its the holidays excuses.. vacancy kills cash flow.
price to get them rented.. and set your lease term to expire in the prime renting season.. I have learned that the HARD way ..
Have you ever thought of offering free cable/internet? Although, if it's not renting, it's likely because the price is too high, so why not lower the rent a bit.. if you have 3 units, make sure when you're showing 1, you pitch the others as options as well! I personally wouldn't do the the teaser rent rate of $100 less, because once it goes up, they will feel like they're paying too much, and it's not worth it.
Could you show us a link to the ad, maybe we can help or offer suggestions?
What we've done with good success
Free application fee with approval and signed lease
Free month with 12 month lease.. so basically we sign them to a 13 month lease, prorate the Free months rent discount over the entire 13 months.. so the "free" month is spread out and we don't show a huge loss of income for the 1st or last month.. and the rent concession is charged back if they don't stay the entire 13 month period..
Definitely agree with @Jay Hinrichs , getting a renter this close to winter or during winter sucks....
Not sure I want a 18 month lease (unless I have a good history with them) but I've done 13-14 month leases to push the end date closer to the May and June months.
I have a nice little studio that I converted into a small one bedroom. Great location and building amendments but the building it self charges for everything that makes the building great.... use the pool, charge, Gym, charge, parking, charge, BBQ, charge and so on. its like an extra $200+ a month to fully use the building. As my rent is already above market level (still just a studio but rent is as 1 bed) but once people do the math its way way over market.
I offer the first 3 months at $1,200 (market rent) and then the next 9 months at $1,300. That alone brings in lots of renters who love the building, i tell them about the building and all the up charging but due to the volume of people, 20% are fine and wont use them anyway. I use the discount to get people into the door and once in, i start working on them.
Thank you all for answering, I do appreciate this.
We have offered a $250 off the 1st month rent for 2 different units we own and I worked like a charm! everything stayed the same 1 month sec. deposit, etc.
We added this to the listing saying $250 off 1st month's rent if application is submitted within 24 hrs.
The laws change on leases over 12 months. Check with your attorney, but it is more difficult to get rid of them if they aren’t a good tenant. Also, make sure you have in your lease that if they break the lease before the term, they have to pay back whatever incentive that they received already!
Offer a M2M lease at the same rate as a term lease. Some tenants may see it as a plus even though length of lease has no bering on how long tenants stay or when they decide to move.
we run winter move in specials with reduced rate till March or April, (lease at the reduced rate till spring) this then keeps the 1 year lease coming due each spring when it is easier to get a tenant.
We have offered the free month but gave the discount at the 13th month. We included contingencies that this is only redeemable if rent is on time for prior 12 months and is subject to a condition inspection. (probably should be doing that anyways)
As others have stated start constructing your leases to avoid this.. One thing that has helped me is the 60 day notice. I have 2 coming open december 1. I have deposits on both already as I advertised Oct 1.
I love using rent incentives especially when traffic might otherwise be a little slow right now. Here are some of things I have done:
1) $200 off second full month's rent
2) Half off the last month of the lease
3) Free $50 gift card to _______(usually Target)
4) One year in December I ran a free holiday ham promotion (limit the ham size of course). I didn't think that one was going to be successful but I got the most compliments on it. I had a vegetarian and gave them a gift card for the equivalent of the ham price.