Leasing incentives work, but they have to be the right ones in the right place at the right time. What works with Millennials doesn’t necessarily work with Baby Boomers. What works in San Jose doesn’t necessarily work in Schenectady.
Most fascinatingly of all, financial incentives aren’t necessarily a be-all, end-all. Jake Meador, writing for Rentvision.com, offered proof of this in a post that referenced the 2009 book Freakonomics, by Steven Levitt and Stephen Dubner. Specifically, Meador noted a passage in which the authors wrote of a daycare center that required parents to pick up their children by 4 p.m. each day. When the owners grew frustrated by late pickups, they instituted a $3 fine — i.e., a disincentive — only to see the tardiness increase.
The authors wrote that a moral incentive (the parents’ guilt over not picking up their kids) had been replaced by an economic incentive (the minimal fine) — that parents could “buy off their guilt.” (And the kicker is that the tardiness did not decrease when the fines were discontinued. At that point, there was neither guilt nor financial incentive.)
Meador extrapolated, writing that rent breaks signal to new prospects that the property is not worth what landlords normally charge, and that when new residents are required after a time to pay full rent, they will perceive that they are overpaying.
Better, Meador writes, to appeal to potential newcomers by highlighting amenities (like a pool, fitness center or WiFi), which will allow them to save money. Better to point out your property’s proximity to good schools, shops or your workplace.
This tracks with a 2017 American Renters Survey showing that most renters would pay as much as 10 percent more each month if it ensured they would get such things as in-suite laundry, central air conditioning or high-speed internet — the point being that convenience is king.
Indeed, most lists of desirable incentives mention upgrades as an effective means of appealing to new renters (or holding on to good ones). That’s a wide-ranging term, and could apply to appliances, painting or remodeling. Amenities and location also made many lists, as did things like gym memberships and online payment apps. In the interests of full disclosure, rent breaks were mentioned, as were getting the first month free, having a reduced security deposit or being given a discount if you pay your rent ahead of time.
But, again, see above. It’s not always about the money.