Rental Concessions: What Landlords Need to Know

Offering rental concessions has become a go-to strategy for landlords looking to stay competitive in today’s rental market. Whether you're facing higher vacancy rates, tenant turnover, or increased competition from newer buildings, rental concessions can give your property the edge it needs to attract and retain quality renters.

But before offering a month of free rent or waiving move-in fees, it’s important to understand how concessions work and how to use them without sacrificing long-term profitability.

In this post, we’ll break down what rental concessions are, the types landlords most commonly offer, when to use them, and how to do it strategically.

If you’re considering rental concessions for the first time, or reevaluating your current leasing incentives, this article will walk you through what you need to know.

What Are Rental Concessions?

Rental concessions are temporary incentives that landlords offer to attract or retain tenants. Unlike permanent rent reductions, concessions are short-term perks designed to make a lease more appealing without cutting into long-term revenue.

These offers are typically structured as move-in specials, discounts, or bonuses that take effect at lease signing or during the early months of tenancy.

Common examples include offering one month free rent, waiving application or move-in fees, or including free parking or utilities. The key is that the concession doesn’t change the base rent listed in the lease, it simply adds short-term value to the deal.

Rental concessions have grown more common in competitive or high-vacancy markets. For instance, in cities where new apartment supply has outpaced demand, landlords often use concessions to fill units quickly without dropping asking rents. This approach helps protect the perceived value of the property while still giving renters a financial break.

Used correctly, rental concessions can help you lease faster, reduce turnover, and compete effectively in saturated markets.

Types of Rental Concessions

Landlords can tailor rental concessions based on market conditions, property type, or target tenant. Here are the most common types to consider:

1. Free Rent

Offering one or more rent-free months is one of the most popular concessions. This usually applies to the first month of the lease but can be spread out (e.g., half off for two months) to maintain cash flow. It’s especially effective in lease-ups for new buildings or during slow rental seasons.

2. Reduced Rent for a Limited Time

Instead of waiving a full month, some landlords offer a temporary rent reduction, say $200 off for the first three months. This approach gives tenants short-term relief while keeping the lease's overall value closer to your target revenue.

3. Waived Security Deposits or Fees

Landlords sometimes waive or reduce the security deposit, application fee, or administrative fees to lower move-in costs. This can make a big difference for tenants with limited upfront cash and is often used to stand out in competitive listings.

4. Free Amenities

Access to parking, gym memberships, in-unit upgrades, or storage units can be included as a concession. These perks may not cost you much operationally but can increase perceived value significantly.

5. Move-In Credits or Gift Cards

Some landlords offer a one-time credit toward moving expenses or a gift card to a local business. This type of incentive works well in urban markets or student housing, where moving costs can be a barrier.

6. Flexible Lease Terms

Offering shorter lease durations, early move-in without prorated rent, or delayed lease start dates can also serve as powerful concessions, especially for tenants with unusual timelines or transition needs.

Each of these options can be used alone or in combination, depending on your goals. The most effective concessions match the needs of your target renter without cutting too deep into your bottom line.

Why Landlords Offer Rental Concessions

Rental concessions aren’t just generous gestures, they’re calculated decisions designed to protect long-term revenue and improve property performance. Here’s why landlords turn to concessions:

Fill Vacancies Faster

Every day a unit sits empty, you lose money. Concessions help get leases signed quickly by giving tenants an extra incentive to choose your property over competing listings. A one-month rent concession can be far less costly than letting a unit sit vacant for multiple months.

Attract Higher-Quality Tenants

When competition is tight, rental concessions can give your property the edge needed to secure reliable, qualified tenants. A waived security deposit or discounted rent period may tip the scales in your favor without attracting renters who can’t afford the regular rate.

Improve Lease-Up Speed for New Properties

New developments often rely on lease-up incentives to gain initial traction in the market. Concessions create buzz, drive traffic, and help you reach occupancy goals faster without lowering long-term rent expectations.

Retain Tenants at Renewal

Concessions aren’t just for new leases. A small incentive, such as a rent credit or amenity upgrade, can encourage existing tenants to renew instead of shopping around. This saves time and money on turnover and marketing.

Adapt to Market Shifts

Rental markets fluctuate seasonally and economically. Offering concessions during slow periods or in markets with rising vacancy rates allows you to maintain pricing stability while staying competitive.

Rental concessions give landlords flexibility. Instead of slashing rent across the board, you can use targeted offers to achieve specific leasing goals.

Risks & Downsides to Watch

While rental concessions can be an effective leasing tool, they come with trade-offs. Before offering incentives, consider the potential downsides:

Short-Term Loss of Income

A free month of rent or waived fees means less money in your pocket upfront. While this may help fill the unit faster, you’re still sacrificing revenue that may not be fully recouped later—especially if the tenant doesn’t renew.

Tenant Expectations

Concessions can set a precedent. If a tenant received an incentive at move-in, they may expect another at renewal. Worse, they may delay signing until you offer something again. Overuse can shift your property's reputation from “valuable” to “always on sale.”

Lease and Accounting Complexity

Incentives need to be clearly documented in lease agreements and tracked properly for accounting purposes. Miscommunication around rent credits or fees can lead to disputes with tenants and bookkeeping headaches.

Appraisal and Valuation Impacts

If you’re planning to refinance or sell your property, heavy use of concessions can reduce its perceived value. Lenders and appraisers look at effective rent—not just the advertised rate—when determining property income.

Tenant Quality Concerns

In some cases, overly generous concessions can attract renters who aren’t financially stable in the long term. Make sure your screening process stays consistent, regardless of any move-in offers you provide.

Concessions work best when they’re offered strategically—not as a default. Keeping them limited, time-bound, and aligned with your broader leasing goals helps avoid unintended consequences.

When & How to Use Rental Concessions Strategically

To get the most out of rental concessions, you need more than a generous offer—you need timing, structure, and a clear purpose. Here’s how to make concessions work to your advantage.

Offer Them at the Right Time

The best time to offer rental concessions is when the market slows or your property is underperforming. This could be during the off-season (like winter), after tenant turnover, or when competing properties are offering incentives of their own. Use concessions as a response to actual leasing challenges—not as a blanket policy.

Know What Your Market Is Doing

Before making any offer, assess what similar properties in your area are doing. Are they offering free rent? Waived fees? Tenants compare listings, so if you're not keeping up with local trends, your property will fall behind. Check rental listings, talk to property managers, and monitor vacancy rates.

Choose the Right Type of Concession

Match your offer to the need. For example:

• Offer one month free rent to fill a hard-to-lease unit quickly.
• Waive move-in fees when you need to reduce barriers for qualified renters.
• Provide an amenity upgrade to retain a good tenant at renewal.

Avoid stacking multiple concessions unless absolutely necessary—your goal is to win the lease, not give away revenue.

Spell It Out in the Lease

Every concession should be clearly outlined in the lease agreement. Include:

• The value of the concession
• The terms (e.g., first month free, prorated rent, waived fees)
• Any conditions (e.g., forfeiture if lease is broken early)

This protects you legally and avoids misunderstandings with the tenant.

Limit Duration and Scope

Set expiration dates on your offers. Concessions should be temporary and used to solve a leasing challenge. They should not become a long-term expectation. Run promotions for a limited time and reevaluate regularly.

Used this way, rental concessions become a strategic lever instead of a drain on profitability.

Real-World Data and Examples of Rental Concessions

Rental concessions aren’t just a theoretical tactic. They’re actively shaping leasing strategies across the country. Here’s a look at how landlords are using them in the real world.

National Trends

According to Zillow and RealPage data, rental concessions are on the rise in many markets. In 2024, over 30% of professionally managed multifamily buildings in the U.S. offered at least one concession, with free rent being the most common. In some urban areas, that figure climbs closer to 50%.

Regional Hotspots

In high-supply markets like Austin, Phoenix, and Atlanta, concessions are almost expected. Landlords in these areas frequently offer 4–8 weeks of free rent to compete with new construction. Meanwhile, cities with tighter inventory, like New York and Boston, use concessions more selectively—often to lock in lease renewals during winter months.

Lease-Up Examples

Newly built properties often rely on aggressive concessions to stabilize occupancy. For instance, a 200-unit building in Denver might offer two months free plus a waived security deposit for leases signed before a target date. Once occupancy reaches a healthy threshold (typically 90%), those incentives taper off.

Renewal Incentives

Some landlords use “quiet concessions” to retain tenants. Rather than advertise them publicly, they may offer current tenants a $250 rent credit, free carpet cleaning, or an appliance upgrade as part of a lease renewal. These gestures can be more cost-effective than facing turnover and vacancy.

Property Manager Insight

A mid-sized property management firm in Chicago reported that offering just one week of free rent led to a 22% reduction in days-on-market during the fall rental slowdown. For them, that translated into $5,000 in recovered monthly revenue across their portfolio.

These examples show how rental concessions—when used strategically—can deliver real results without undermining long-term income.

Making Rental Concessions Work for Your Bottom Line

Rental concessions are more than just promotional tools, they’re a strategic way to stay competitive, reduce vacancy losses, and attract quality tenants in any market cycle. When used correctly, they can boost occupancy and preserve long-term rent values without forcing you to drop your asking price.

But concessions come with trade-offs. Offering them without a clear plan, or relying on them too often, can chip away at profits and create challenges at renewal. That’s why it’s important to tailor each concession to your goals, document everything in your lease, and track performance over time.

If managing lease incentives, tenant negotiations, and market shifts feels like a lot to handle, a professional property management company can help. Property managers understand when to offer concessions, how to structure them properly, and how to market your property without compromising profitability.

Consider using our free search tool to find the perfect property manager near you.

Frequently Asked Questions About Rental Concessions

Are rental concessions taxable?

Generally, rental concessions such as free rent or waived fees are not considered taxable income for landlords because the money was never collected. However, you should consult a tax professional to understand how concessions may affect your rental income reporting, especially if you're claiming depreciation or using property management software for accounting.

Can I advertise rental concessions in my listings?

Yes—and in competitive markets, you should. Promoting concessions like “1 month free” or “no security deposit” can increase listing visibility and boost inquiry volume. Just make sure the terms are clear and consistent with your lease agreements to avoid confusion or legal issues.

How long should a concession last?

Most concessions are short-term—often limited to the first month or two of a lease. Offering concessions beyond that timeframe can eat into profitability. Use them to close deals or solve temporary challenges, not as a long-term revenue strategy.

Should I offer concessions quietly or make them public?

That depends on your goal. If you want to generate more leads, public offers work well. If you're trying to retain a specific tenant or negotiate a renewal, a private concession may be more appropriate. Either way, consistency and documentation are key.

Do concessions affect lease renewals?

They can. Tenants who received a move-in incentive may expect something at renewal. While you don’t need to offer the same concession again, consider alternatives like small rent credits, free maintenance upgrades, or other perks to encourage lease extensions.