DealsChicagoDowntown / Loop

Is two months’ free rent the new norm for new apartments?

by Joe Zekas on 10/28/13

Winter isn’t quite here yet, but winter specials are at a number of the new apartment projects in downtown Chicago.

Some of the buildings are aggressively courting renters with offers of two months’ free rent on selected units, and other new buildings are quietly matching those offers. You’ll also find similar offers at some of the established rental buildings.

Will the rent discounts at some buildings force others to match their prices during the traditionally slow winter market that lies ahead? Will the discounts get locked in as new buildings open for occupancy next year?

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{ 2 comments… read them below or add one }

Paul T October 28, 2013 at 1:00 PM

Why do they give free rent? Why don’t they just lower the rent? It creates confusion. Everyone is going to move to get the most free rent and then not stay like a 0% credit card balance transfer offer. Is there some reason why they don’t just lower the rent to meet the market? Also why are the apartment building rents so high to begin with when there are all these new buildings? Seems dumb. My company is not offering a higher salary option in exchange for 2 months with no pay. Why? It makes no sense.

Is there someone who can clarify this free rent strategy please.

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Joe Zekas October 28, 2013 at 1:19 PM

Paul,

Some of the “free rent” offers give renters the option of prorating the savings over the term of the lease – which is exactly the price reduction you’re suggesting.

The “free” month or two gets renters in the habit of paying the higher rent and lessens sticker shock on renewal. And it signals value at the higher level.

There’s a perception – right or wrong – that existing tenants are less disturbed by free rent offers than they are by rent reductions that result in their neighbor paying less rent for an identical apartment.

The free vs reduced debate could go on at length. Suffice it to say that you can find similar offers in cars, furniture sales, etc. etc. etc. It’s not an unusual marketing tactic.

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