Concessions In Single-Family Rentals?

Question: I keep hearing that the multifamily properties are using concessions to get residents. What are they, and can I use them in my single-family home?

Answer: A concession is a discount on the rent, or other monetary benefit given to a resident, in exchange for them signing a lease. A concession agreement will provide that if the lease is breached by the resident for any reason, that concession amount is owed back to the owner. Imagine an instance where rent is listed at $2,000 per month, but if the tenant signs a 13-month lease, they will be given the second month free. If they fulfill the lease, they effectively paid for only 12 months. However, if they breached the lease, they would owe back that extra month. This tactic is common in multifamily when there is a lot of supply. There is nothing legally improper about employing this in single family homes, provided it’s properly documented; despite this, it is rarely used in single family homes.