Why Offering Free Rent During Lease-up Can Hurt Your Investment: A Better Approach for Apartment Developers
We’ve noticed a growing trend among apartment developers—offering “one month free rent” to attract more tenants and boost lease-up activity. While this might seem like a quick fix to fill vacancies, it often leads to unintended consequences, including inflated rent prices for the remaining lease term and reducing your average monthly rent. This practice can significantly impact your building’s overall value and long-term profitability.
Instead of resorting to free rent, consider maintaining a consistent and fair rental rate. This approach benefits both tenants and property owners, creating a stable and mutually beneficial relationship.
If you find yourself needing to attract more tenants or fill several vacant units, consider offering alternative incentives. For example, you could allow tenants to move in a week early or upgrade apartment finishes—improvements that remain with the unit even after the tenant moves out. These incentives can add value to your property without undermining your long-term financial goals.
