In an attempt to stem the tide of fleeing residents in an economic downturn, landlords across the US are showering tenants with gifts that include everything from flat-screen TVs to cash in the hope of encouraging them to renew their leases, writes the Wall Street Journal (subscription required).
In a jobless recovery, they're hoping to avoid the expense of filling empty units. In the third quarter, the national apartment-vacancy rate hit 7.8%, a 23-year high, according to Reis Inc., which tracks vacancies and rents in the top 79 markets.
And rising unemployment is forcing some out-of-work tenants to seek ways to cut costs, including getting a roommate, moving home with Mom and Dad or trading down to a cheaper apartment. Owners are focusing on keeping existing tenants because when apartments become vacated they can sit empty for months and often require marketing, painting, brokerage commissions and other expenses to attract new tenants.
Denver-based UDR is offering renewing tenants a flat-screen TV, new carpet, kitchen upgrade or $300 in cash, according to the WSJ. In New York City, landlords are paying broker fees, too. Equity Residential in New York says it has paid about $1.5 million in such commissions so far this year.
"Many companies are doing whatever they can to keep units occupied, especially heading into the seasonally slower leasing period," Paula Poskon, an analyst with Robert W. Baird & Co., told the WSJ.
Landlords to tenants: please stay!