Determining how to handle a vacancy depends on your local rental market, how long your property has been empty, and your financial goals. In many cases, a thoughtful rent concession (also known as a leasing incentive) can help you stay competitive while protecting your long-term rental rate. In others, adjusting your asking rent may be the smarter move.
When your rental sits vacant, every day can feel expensive. You may be wondering whether lowering the rent is the fastest way to attract tenants, or if offering a rent concession can achieve the same result without permanently reducing your income.
Here's how to decide.
What's the Difference Between Lowering Rent and Offering a Rent Concession?
While both strategies are designed to attract renters, they affect your bottom line differently.
Lowering rent means permanently reducing your monthly asking price. If you lower a $2,000 rental to $1,900, you'll collect $100 less each month for the duration of the lease—and potentially future renewals if you increase the rent later.
Rent concessions are temporary offers that encourage renters to sign a lease while allowing you to keep your advertised monthly rent. Common incentives include:
- One month free rent
- Half off the first month's rent
- Waived application fees
- Free upgrades
- Free parking or storage
- Flexible move-in dates
- Free internet or other amenities
Because incentives are typically one-time offers, they can help fill a vacancy without permanently lowering your property's rental value.
When Lowering Rent Makes Sense
Sometimes, lowering your rent is the right business decision. Consider reducing your asking rent if:
- Comparable rentals in your area are consistently priced lower.
- You've had very few inquiries or showings.
- Your property has been vacant longer than similar rentals nearby.
- Market rents have declined since you last listed the property.
- New competition has entered your market.
Before making a change, compare your listing to similar properties with the same number of bedrooms, amenities, location, and condition. If your rental is priced well above the market, a modest adjustment may generate more interest than any incentive.
The goal isn't to become the cheapest option on the market—it's to price your rental competitively.
When a Rent Concession Is the Better Option
If your rent is already in line with comparable properties, a temporary incentive may be enough to encourage renters to choose your listing over another.
Leasing incentives often work well when:
- You're competing with newly built apartment communities.
- Leasing activity slows during the off-season.
- You want to fill a vacancy quickly without changing your long-term pricing.
- Your property receives interest, but renters hesitate before applying.
For example, offering one month free on a 12-month lease allows you to advertise your full monthly rent while giving renters immediate savings. When the lease renews, you start from your original rental rate rather than a discounted one.
Which Option Costs Less?
Many landlords focus on the cost of an incentive but overlook the cost of an extended vacancy.
Imagine your rental is listed for $2,000 per month.
|
Cost comparison |
Option A: Lower rent by $100 |
Option B: Offer one month free |
|
Standard monthly rent |
$2,000 |
$2,000 |
|
Tenant’s monthly payment |
$1,900 |
$2,000* |
|
Annual rental income |
$22,800 |
$22,000 |
|
Total first-year reduction |
$1,200 |
$2,000 |
|
Type of discount |
Recurring monthly reduction |
One-time concession |
|
Rent at renewal |
Starts from $1,900 |
Starts from $2,000 |
*Assumes 1 month free amortized as a concession (i.e., list rent stays $2,000; effective first-year revenue is lower).
At first glance, lowering the rent appears less expensive. However, what if reducing the rent still doesn't attract a qualified tenant for another month? You've now lost an additional month of rent while collecting a lower monthly payment going forward.
That's why it's important to calculate the total cost—not just the advertised discount.
Don't forget the cost of vacancy
An empty rental continues to generate expenses, including:
- Mortgage payments
- Property taxes
- Insurance
- Utilities
- Lawn care or snow removal
- HOA dues, if applicable
- Routine maintenance
- Marketing costs
The longer a property remains vacant, the more those expenses add up without rental income to offset them. Sometimes filling a vacancy a few weeks sooner is worth more than holding out for your original asking price.
Other Ways to Make Your Rental More Competitive
Lowering rent and offering incentives aren't your only options. Before changing your pricing, ask yourself whether your listing could be stronger. Consider updating:
- Listing photos with brighter, higher-quality images
- Property descriptions that highlight desirable features
- Curb appeal and landscaping
- Interior paint or lighting
- Minor cosmetic repairs
- Response time to rental inquiries
Even small improvements can increase interest without affecting your rental income.
How to Decide What’s Right for You
Ask yourself these questions before making a change:
How long has the property been vacant?
If it's only been a week or two, you may not need to adjust your pricing yet.
Are comparable rentals leasing faster?
If similar properties are renting quickly at lower prices, your rent may need to be adjusted.
Are you getting inquiries but no applications?
A leasing incentive might provide the extra push renters need to commit.
Can your cash flow support another month of vacancy?
Sometimes accepting slightly less income now is better than waiting for the perfect tenant.
Common Mistakes That Can Extend a Vacancy
Lowering rent too quickly
Give your listing enough time to reach renters before making major pricing changes.
Ignoring the competition
Review comparable listings regularly. Rental markets can change quickly.
Forgetting to advertise your incentive
If you're offering a concession, make sure it's clearly mentioned in your listing.
Waiting too long to decide
Holding out for months can cost more than making a strategic adjustment early.
Your Listing Strategy Matters
Lowering your rent isn't always the fastest—or most profitable—way to fill a vacancy. In many situations, a temporary leasing incentive can attract qualified renters while protecting your long-term rental income.
Before making either decision, compare similar listings, calculate the true cost of vacancy, and look for opportunities to strengthen your listing. A strategic adjustment today can help you fill your rental sooner without sacrificing more income than necessary.
With Apartments.com free Rental Tools, you can list your rental in minutes and reach millions of renters. You can also screen applicants, collect rent online, and manage maintenance requests—all in one place.
FAQs
Is it better to lower rent or offer one month free?
It depends on your market. If your rental is competitively priced, a one-time incentive may attract renters while preserving your long-term rental rate. If your asking rent is significantly above comparable properties, lowering the rent may be the better option.
How long should I wait before lowering my rent?
There's no universal timeline. Monitor inquiries, showings, and comparable listings. If similar rentals are leasing while yours isn't, it may be time to reassess your pricing or marketing strategy.
Can I offer incentives instead of lowering rent?
Many landlords use temporary concessions, such as free rent or waived fees, to remain competitive without permanently reducing their monthly rental rate.
