Ask our chief economist: What is rent relief? How to ask, negotiate and save on your next apartment

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• Lease incentives are generally one-time incentives such as three months of free parking, six weeks of free rent or a waived security deposit.
• Rebates can be great for a renter's budget by reducing short-term housing costs, but can lead to surprisingly high costs when it comes time to renew.
• Landlords offer more concessions when rents are flat or falling, or when demand is low, to attract tenants without lowering rents.

Rents are starting to fall in some pockets across the country, which is good news for renters and a sharp contrast to record highs caused by the pandemic. The reason for this continues to hit the market, causing supply to exceed demand. Rents are falling the most in metros that have seen the most gains in supply.

But for homeowners, oversupply often results . When this happens, they can offer rent concessions to attract tenants and fill units more quickly. That's what's happening now, and that's why The landlords offered at least one concession in July. These concessions are designed to make rentals more attractive without permanently lowering the monthly rent.

Renters may now find themselves in a negotiating position if they can get a better deal . But knowing how to identify the benefits and when to take advantage can be difficult. So what exactly is rent relief and how can it benefit you as a tenant?

we asked to answer some common questions for renters. Let's dive in, discover the answers and learn tips along the way.

What is rent relief?

A rent concession (also called a rent concession) is a temporary discount or incentive that landlords can offer to make rent more attractive. “Concessions are a way to sweeten the deal for tenants without reducing the rent,” says Fairweather. “They can include a free month's rent, waived security deposits or waived fees such as application or parking fees.”

Landlords typically use rebates to fill vacancies faster or to stay competitive in the market. While these one-time offers can help lower a tenant's upfront costs, they generally don't affect the long-term monthly rent, so it's important to carefully review the terms before signing a lease.

Rent concessions vs. discounts

Rental concessions and rebates both offer financial relief, but in different ways. Concessions are temporary concessions, such as a free month's rent or waived payments without reducing the monthly rent. However, discounts reduce the monthly rent for the duration of the lease and provide ongoing savings.

Types of rent concessions

Lease concessions vary widely and can offer tenants savings or added value. Depending on your landlord, the lease and any negotiations, you may be offered one or more discounts.

Common types of lease concessions include:

• Free rent: Offered rent-free for a certain number of months, usually at the start of the lease.
• Rent discount: A temporary reduction in the monthly rent for a certain period of time.
• Denied payments: Landlords can waive application fees, administrative fees or move-in fees.
• Discounted security deposit: A lower security deposit than is usually required.
• Free facilities: Free access to services such as parking, gym or storage.
• Lease flexibility: To offer shorter or more flexible lease terms without the usual premium.
• Improved unit features: Free or discounted unit upgrades such as appliances or flooring.

How to claim rent relief

Asking for rent relief involves researching, and documents. Here's the breakdown.

1. Research the market

If you're a renter looking for a new apartment, research is essential. Fairweather suggests, “shop around for what other properties have to offer before you advocate for a potential homeowner's concession.” This helps you understand the market and puts you in a better position during negotiations.

2. Make a clear request

Prepare a clear request that explains current market conditions and be specific about the discount you're looking for. Whether it's reduced rent or waived fees, it's important to have data to back up your request.

3. Negotiate a lease renewal

If you want to renew your lease with an additional discount, communication is key. Explain how the concession will help you stay longer and bring market information if necessary. If your initial request is not feasible, be open to negotiation and flexible with alternatives.

4. Document the contract

If you and the landlord come to an agreement, make sure the concession is written into the lease or added as an addendum. Before signing, carefully review all the terms and plan for future expenses when the grace period ends.

Rent concessions for tenants

Rent concessions may initially make a property more affordable, but once the concessions expire, tenants may see a significant increase in overall housing costs. So planning ahead is important. Here are a few considerations to keep in mind.

Calculate the total cost of a concession

To get the full benefit of the discount, convert it to a monthly cost and multiply it by the number of months you receive it. A $1,000 waived security deposit is an immediate $1,000 savings, while $60 waived parking for three months is worth $180.

Expect increased costs after the discount ends

This is crucial. “Once the concessions expire, you could see a huge increase in your overall housing costs,” warns Fairweather. For example, if parking costs $60 a month and you have three months of free parking, that's a total savings of $180. After the rebate, you have to start paying $60 a month, which increases your housing costs.

Look at the fine print

Be aware of provisions that may make the concession less valuable in practice, and pay attention to details. 1 month free parking vs 12 months is a big difference.

Prepare your budget

Make sure you don't budget or overspend. “You have to be prepared for increased costs after the concession ends,” Fairweather said. “The tenant's security deposit won't matter at the time of the lease extension, but discounted service fees can become an expensive ongoing expense.” Knowing and improving your financial situation during your rental period .

Why do property managers offer rental discounts?

Property managers may offer rent concessions for a variety of reasons. They get used more often in a competitive market with high vacancy rates. Landlords may also offer concessions to retain existing tenants, reduce turnover costs, or respond to economic downturns.

In addition, “It limits rent growth in some places (),” notes Fairweather. “But landlords can still be a factor by offering concessions such as free parking or a few months' free rent for just one year, while increasing the base rent.

In this case, the official rent stated in the lease will be higher, while the tenant's total payments remain the same during the lease. If the tenant decides if they don't negotiate for additional benefits, their monthly payments could increase significantly.

Why are concessions so widespread now?

New apartments () from the last two years due to supply and demand imbalances. Many landlords respond by offering discounts to drum up interest. This trend is mainly due to this which occurred during the pandemic that led to today.

So, as new apartments continue to enter the market and supply outstrips demand, rents have leveled off or even declined. in some places. “When rents fall or stay flat, concessions become more common,” adds Fairweather.

In Sun Belt cities like Tampa and Austin, therefore, a greater percentage of landlords offer rebates. A third of property managers nationwide have offered concessions by mid-2024.

Rebates can also improve the long-term rental market by helping property managers attract new tenants during periods of low demand. “They are, in a sense, a way to breathe life into their markets,” he notes.

How to find discounts on online rental listings

It's easy to find promotions and discounts in the online marketplace. Many will indicate that the listing is a good value or offer incentives.

Active for example, any listing that offers an incentive will have a “Deal” watermark on the photo.

When you click on a listing, you'll find a more detailed description of what they offer.

You can also filter to show only listings with deals or promotions

When in doubt, call the property manager or landlord to clarify what incentives they offer. Their phone number should be listed.