More Building Owners Willing to Throw in Extras to Fill Apartments
Good news if you’re apartment hunting. You might find the market a little more friendly than in years past. Even though inventory is still extremely tight - about a 2 percent vacancy rate - Gary Malin of Citi Habitats finds many owners are willing to play "Let’s Make a Deal."
"Almost 30 percent of deals we did last month had a concession, which is the highest it's been since 2010," Malin says.
By concession, he means something the owner uses to entice a tenant into signing.
"Kind of think of it like a sale," Malin says. "It's something to drive activity to your building and get the leases done faster."
These concessions can be an added convenience.
"Maybe a free gym membership, maybe free storage or something along those lines," Malin says.
But what really moves the needle he says are the biggies: a free month’s rent or payment of the broker’s fee – sometimes both. And since the broker's fee is typically 15 percent of the first year's rent, that’s like saving almost two months of rent right there.
"So if you're able to not pay that fee, any money saved is good money for the tenants I'm sure," Malin says.
Whether you're negotiating on a new place or renewing the lease on your current apartment, Malin says a friendly approach is key.
He suggests you do your homework. Before you ask for the moon, he says, it’s important to understand the market and the specific building you are dealing with.
"If an owner only 2 or 3 vacancies in a 300 unit building, they're going to be very unlikely to negotiate," Malin says. "So the most important thing is knowledge. If you come in asking for something pretty significant when the market doesn't justify it, more likely than not they're going to say thank you but no thank you."