Key Takeaways
- Rental incentives can help Boise landlords attract qualified tenants faster and reduce costly vacancy periods in a competitive market.
- Short-term promotions like discounted rent, waived application fees, or flexible lease terms can increase listing visibility without permanently lowering rental rates.
- While incentives can generate more applications, landlords should be mindful of attracting price-focused renters or creating unrealistic renewal expectations.
- The decision to offer a leasing incentive should be based on local market conditions, vacancy rates, property competition, and seasonal demand.
- Working with a professional property management company can help landlords determine when rental incentives make sense and maximize long-term investment returns.
Securing trustworthy occupants has always been one of the most significant duties of rental owners. Having consistent tenants is ideal, but the techniques used to attract tenants have changed over the years, and the rental market is more competitive than ever.
Property owners in Boise, Idaho, face an increasingly prevalent question: Does providing deals to potential renters help improve occupancy rates and overall leasing results?
In this article, we will discuss how you should address this concern. This will include an evaluation of the advantages and drawbacks of offering a deal and the best time to do so.
At Realty Management Associates, our team of experts have the knowledge and experience to guide rental owners and investors through every stage of the property management journey, from tenant screening and rent collection to leasing, maintenance, and more.
The Rental Market in Boise
Landlords can typically make better decisions about whether to create an offer/deal when they completely understand Boise’s rental marketplace.
For a variety of reasons, Boise’s popularity has grown at a steady pace over recent years, including economic growth, population migration, employment growth, lifestyle appeal, and access to outdoor recreation.
Compared to larger Western states, Boise’s rental market is relatively inexpensive.
Historically, all of these factors created an environment that supported strong demand for rental housing. However, markets are not static. Recently, new apartment development, changing interest rates, and affordability considerations have changed the way tenants make decisions.
In some parts of Boise, new apartment development has added supply and created additional options for tenants, resulting in more competition among landlords.
As supply rises, tenants typically become more selective. For example, younger and more modern renters will look to compare rental prices, amenities, lease flexibility, and move-in costs, as well as property condition, and responsiveness of the landlord.
Therefore, depending on the competitiveness of a particular market, a well-designed leasing incentive could significantly increase the exposure of a property and its appeal to the marketplace.
What is a Rental Deal?
A rental deal is a limited-time offer designed to influence prospective tenants to sign a lease. Most often, rental incentives decrease a tenant’s initial costs and add urgency to the leasing process rather than significantly decreasing rent over the long term. For example, common rental deals include:
- Discounted first month’s rent
- 1 month free
- Eliminated application fee
- Lower security deposits
- Flexible lease start dates
- Utilities included
- Move-in bonuses
- Free parking or storage
Ultimately, rental incentives are meant to attract quality tenants at a faster rate while avoiding losses associated with vacant rental units.
Advantages of Providing Incentives for Boise Rental Properties
1. Quick placement of tenants
The primary benefit of offering incentives to tenants is speed. When renters are looking at multiple Boise rental listings, they tend to do their cost research well before making their decision.
Therefore, a fast process of placing a tenant into a unit can accelerate the amount of time a rental unit stays empty, decrease rental marketing and the need to screen new tenants, and advertising expenses, and reduce utility costs associated with having a tenant in an empty unit. Speed of placement may be equally important to many landlords as rental price.
2. Enhanced competitive market visibility
In Boise, renters are increasingly relying on the internet to locate rental properties. Homes that feature promotional offers get significantly more views and inquiries than those that do not offer incentives. When multiple homes have similar layouts and rental price points, the property with the incentive will attract more attention.
3. Maintaining rental price integrity
Landlords do not need to permanently lower the rental amount. The short-term use of incentives and promotional offers will allow landlords to preserve the rental price.
As a result, landlords can maintain their intended rental pricing structure indefinitely, thereby maximizing the potential for lease renewal and creating the best valuation of their rental property.
4. Increasing the number of applicants
The increased number of inquiries generated by a rental property creates a larger pool of applicants. As a result, potential incentives will motivate qualified renters to show more interest in the rental property than they would have if financial barriers existed.
Potential downsides to offering discounts
1. Attracting renters who are primarily price-driven
Many applicants are motivated by discounts alone. These individuals are unlikely to stay in the rental market for an extended period of time because they value cost savings over stability when it comes to housing. These types of renters are more likely to jump around and look for better rent prices, leaving landlords back at square one searching for new tenants.
2. Reduced short-term revenue
Reduction in short-term revenues is a natural result of offering a deal on a rental property. If deals are made without proper justification and planning, landlords may risk losing profits in exchange for little to no benefit.
3. Perceptions challenges
Aggressive promotional campaigns can lead to accidental perception errors on the part of prospective tenants.
For example, prospective tenants may question why the property is being offered at a discount.
4. Renewal expectations
When tenants receive concessions at move-in, they tend to expect similar discounts when renewing their leases. Landlords must clearly communicate that the concessions are for one time only and will not be repeated in the future. Property management experts will have plenty of knowledge and insight into managing these situations.
When Boise Landlords Should Consider Offering Deals
There are many instances in which a promotion may be warranted. These include during an extended period where the property has not been leased, the leasing season is not currently in progress, new development competition has negatively impacted the property, or when landlords wish to maintain fiscal stability through pricing preservation strategies.
Situations in Which Deals Would Not Be Appropriate
Landlords should avoid offering deals when there is already a significant amount of demand for the property, the property has distinctive competitive advantages, and the pricing is equal to the market price. It is extremely important not to jump the gun on offering rental deals.
Bottom Line
Offering a deal to appeal to potential tenants seeking to lease property in Boise, ID, may be beneficial if done properly.
Due to the ongoing growth of Boise’s popularity among renters, the increased inventory and anticipatory changes in what tenants want within a community have created a need for landlords to think beyond just location and consider additional strategies to increase the speed of occupancy.
Instead of simply offering a discount automatically, consider all of the factors influencing your decision. Things like the neighborhood’s rental market, the cost of vacant units for the time period they were not occupied, supply and demand in the area, and the positioning of the property relative to other properties in the area.
Partnering with a professional property management team can help landlords expertly navigate the ins and outs of owning a rental property, reduce the stress of day-to-day obligations, and ultimately maximize the return on their investment.