Residents fleeing the city in the wake of COVID-19 may have produced an unexpected side effect for NYC renters. According to a report from Douglas Elliman, rental concessions have reached record highs as landlords try to offset a whopping 5.75% Manhattan vacancy rate. We spoke with Corcoran’s Armond Adams to get the details on rental concessions and how to negotiate the best deal.
What is a rental concession?
A rental concession is a reduction in price or other benefit provided to renters to entice them to sign a lease. For example, landlords may offer a few months of free rent, reduced rent, or provide a larger unit at a reduced price.
Other benefits may include:
- Payment of broker fee
- Merchandise, gift cards, or subscriptions
- Amenities discount
A landlord may choose to offer a concession when there is a strong renters market. The added appeal allows them to rent a unit quicker and saves them the cost of a prolonged vacancy.
Choose the right season to boost your chance of getting a rental concession
The busiest months for finding a rental are June through August. The city is filled with students moving for university, recent grads looking for housing, and residents moving apartments over the summer. Adams says 70% percent of apartments in NYC are rented in the summertime. Competition is high and units can rent within just a few days or less.
However, there are deals to be had if you can stomach moving in the winter. Unlike popular summer months, rentals tend to stay on the market longer in winter. If you choose to move in winter months, there will be less inventory, but you’ll have a better chance of getting a concession.
“A typical broker’s fee is usually 15% of the annual rent,” explains Adams. “Having the landlord cover that expense instead is already a big savings.”
Don’t be afraid to negotiate
When searching for a rental, everything is negotiable. You don’t have to wait for a concession to be offered to get one. Be proactive and ask. You may not be able to get free rent, but you could get a fee waived or a temporary discount on amenities. The worst a landlord can say is “no” so don’t be afraid to ask.
With winter approaching and a high vacancy rate due to people fleeing the city, now is a great time to ask for a concession. The key is to be strategic. Smaller landlords will have more flexibility to negotiate versus a large property management company.
“Now with COVID more people are leaving the city,” Adams explains. “Concessions that would normally have happened in winter pre-pandemic are being offered now.”
It’s also important to note that landlords may have already significantly lowered their price to entice new renters. Localize allows users to view a unit’s rental history so you can better determine whether or not you’re getting a good deal.
“If the rent has already been reduced, landlords may not be willing to negotiate the price down further,” notes Adams.
Rental concessions are temporary
All good things must come to an end, and rental concessions are not exempt. It’s great to lock in a discounted rate, just be aware that at the end of your lease term the new rate at renewal may be significantly higher. If you’d like to stay in the unit long term, do some research to get a ballpark idea of what market rate rents are for units similar to yours. It will help you avoid sticker shock when it comes time to renew your lease.
Searching for a home in NYC? Let Robin, our home hunting advisor, jumpstart your home buying journey today.