Running rent specials can increase your leasing velocity.
But there are right and wrong ways to do this.
Too many apartment communities are losing revenue because their rent specials are too broad.
Follow along to learn how to run rent specials without hurting your apartment's revenue.
How do broad rent price specials hurt apartment revenue?
We've all seen these types of rent specials.
"First month's rent FREE for every new lease!"
They come around like clockwork. Demand is about to slow, so communities offer a broad rent special for relief.
Community-wide rent specials like these are typical but ultimately hurt revenue—even if they attract more renters.
Let’s look at the numbers. If rent is $1,200/month, offering the first month free affects the profitability of the entire lease:
- Total revenue without a rent special: $14,400
- Total revenue with the first month free: $13,200
- Revenue loss due to the special: $1,200
- Percentage of revenue lost: 8.33%
That’s just one lease. If you sign 20 new leases during the special, you’ll lose $24,000 in revenue over 12 months.
Even if the special only partially discounts rent, the price you pay compounds with every lease you sign.
Beyond the financial fallout, an approach like this also begs the question, 'How many of the units including in this rent special actually needed a discount to attract renters?'
Why run rent price specials on targeted units?
With broad, community-wide rent specials, you’re discounting units that could easily rent at full price.
The result? The problematic units needing a boost from the special don’t benefit as much because reducing rents just further entices renters to lease your already in-demand units.
This creates a costly cycle where you’ll need to lower rents even further for units that remain vacant too long.
To run specials that actually help increase your communities’ profitability, you need to be more targeted in when and where they're applied.
To run specials that actually help increase your communities’ profitability, you need to be more targeted in when and where they're applied.
Your rent specials should start at the individual unit level and, only if necessary, include all units in a struggling floorplan.
By focusing on running specials on targeted units, you can guide renters to lease where demand is low and minimize the impact on your overall revenue.
How to better target your apartment rent specials
1. Increase marketing efforts first
Yes, you read that right.
Before pulling the discount lever, start by focusing your marketing strategy on problem units or floorplans. This could include increasing your digital advertising budget for a campaign featuring that unit's floorplan or making it more visible on your website.
If marketing doesn't generate leads fast enough, follow those efforts with coinciding pricing adjustments.
This prevents the habit of immediately resorting to discounts, helping you make more strategic, cost-effective decisions.
2. Set clear vacancy duration thresholds for unit-level specials
To avoid discounting rents too early or unnecessarily, set specific vacancy thresholds to determine when to run a special.
For example, if you set a goal of 14 vacant days between residents, you could trigger a rent special on any unit exceeding that vacancy duration.
You can also introduce incremental discounts at 21 or 28 days, adjusting the rate as the vacancy persists. This way, a unit that’s been vacant for only 6 days doesn’t receive the same discount as one that’s been vacant for 30 days.
Setting these thresholds ensures that rent specials are only applied to units needing help.
3. Pay attention to upcoming lease expirations for more targeted floorplan specials
Assessing current supply and upcoming lease expirations helps determine whether discounts should be applied at the floorplan level.
Let’s say you have four different floorplans, each with 20 units. If one floorplan has six vacant units and another has only two, you wouldn’t apply the same discount across both.
Additionally, you need to consider upcoming expirations. For instance, if one floorplan has just two vacant units today, but six more will come up in the next 30 days, you could get ahead of those vacancies by ramping up marketing efforts and selectively applying rent specials to that floorplan.
To recap, start with unit-level specials based on vacancy duration, then run specials on entire floorplans when necessary. This ensures that discounts are applied only to units that need a boost in demand, and avoid broad specials that cut into your revenue.
The goal is to target rent specials where you need help and avoid community-wide, broad specials that unnecessarily cut into your revenue.
The Takeaway
Most apartment communities lose revenue by running broad and untimely rent specials. A better approach is to run more targeted specials, which can sustain occupancy while maximizing your community’s revenue.
Need help running better-targeted specials? RentVision Revenue Management can help you automatically apply unit and floorplan specials across your entire portfolio Learn more by scheduling a demo today!