When you’re a landlord, sometimes you need to give a little to get a lot. This is especially true in a market like downtown Chicago with an ever-growing supply of luxury apartments. Although luxury apartment demand has been high in recent years, the rental market is extremely seasonal. When trying to attract renters in the slower winter season, professional management companies will often offer discounts, credits, perks, and other enticements to get leases signed and cash flowing.

These are known as apartment concessions, and if you are looking for a Chicago apartment for rent, you should be aware of when these concessions are most prevalent and how to find out which buildings are offering them at any given time.

What is an Apartment Concession in Chicago?

A rent or apartment concession can be anything that lowers the net amount a landlord earns from a tenant. Typically for Chicago, luxury apartments will offer anywhere between two weeks to two months of free rent, typically in the fall and winter when leasing is less frequent. Similar to the sales market in Chicago, the rental market is highly seasonal with demand and pricing fluctuating depending on the time of year.

Tenants may also see discounts on other expenses such as parking and storage. At times, we’ve seen gift cards of $500+ or free flat screen televisions offered to entice new tenants. Albeit less frequently, current tenants up for renewal also request concessions in the form of improvements, such as new appliances (should other units be under renovation) or fresh flooring.

The most common concession that we typically see year-round is the 24-48 hour “look and lease,” which gives the tenant the option to receive the move in (admin) fee as a rent credit should they sign a lease within a day or two of their showing. Admin fees are used in lieu of security deposit at professionally managed apartment buildings.

Such concessions are usually limited time deals that not only vary by building, but also unit-to-unit. So, the management company might offer one month free on one-bedroom layouts only should they have an unusually large supply of that unit size specifically. Generally, free rent concessions require the tenant move in or sign their lease by a certain date to qualify.

Privately-owned rentals (i.e. owner-managed condos) do not usually offer concessions and instead opt to lower the rent price instead when units sit vacant.

Common Luxury Apartment Concessions

While an apartment building owner can do a lot of creative things to attract new tenants (free Stan’s Donuts and coffee in the lobby every morning!), some of the most common Chicago apartment concessions include

  • Rent reductions, discounts, and waivers. This can include waiving any first and last month rent requirements, prorating monthly rent, or offering free rent for the first month or two.
  • Waived fees. Like airlines and hotels, many apartments come with a bunch of little fees that can add up to a lot. This can include background/credit check fees, administrative or move in fees, parking fees, gym fees, key fees, etc. Over time, waiver of some or all of these fees can be just as valuable as any rent reduction.
  • Cosmetic improvements. This concession, which may include new paint, closet organizers and window coverings, can be a win-win for the landlord and the tenant. Management adds value to their property that will remain after the tenant has moved on while the tenant gets a more attractive place to live on the building’s dime.
  • Free internet and utilities. Most luxury apartment buildings offer utility packages and will sometimes waive utility fees for a certain number of months to attract new lessees.
  • New appliances. As with cosmetic improvements, a new stove, refrigerator, dishwasher, or washing machine can add value for all parties. This is more common in buildings that are already undergoing improvements elsewhere.

Why Do Buildings Offer Concessions?

The main reason an apartment building offers a concession is to lease vacant units as soon as possible, because every day a unit sits vacant, the building loses money. But why wouldn’t they just lower their rent prices similar to a private landlord or listing agent would?

For starters, apartment buildings rely on computer-generated pricing systems, which is why you’ll see luxury Chicago apartments for rent listed at odd, non-rounded prices (i.e. $2032 per month). While the algorithm does take supply and demand into account when setting gross rent prices, there’s typically little human involvement. Concessions can make it easier to make specific units more attractive without having to alter a building’s entire pricing ecosystem.

The secondary benefit to a concession as opposed to lowering the rent price boils down to strategy. For a newly built apartment complex, an advertisement for two months’ free rent can help lease the building up faster. Even established buildings are driven to offer concessions if their competition is also using them as a way to entice new lessees and retain strong occupancy rates.

How to Find an Apartment Concession

Finding rental concessions can be difficult as they change frequently and are rarely advertised on the major apartment search websites. However, qualified real estate agents are often in the loop on these deals. At Z Chicago, we’ve worked closely with hundreds of buildings downtown over the past decade. Our team receives daily email updates directly from the leasing staff. These emails deliver the latest prices and upcoming availability and also detail any current concessions and requirements.

When you opt to use a Z Chicago agent to search for an apartment, we never hesitate to inquire about any available concessions on your showing. Concessions will always be reflected in writing and due to fair housing laws, must be offered to every tenant whether or not they use a broker. Under Illinois law, any rental concession with monetary value must be included in the lease itself.

Most importantly, understand that while a month or two of free rent can help lower your net rent, that will likely not be the case when it comes time to renew. If an apartment is only within your budget when you factor in two months of free rent, only sign a lease under the expectation that you’ll move again next year once that concession is removed.

Looking to Rent in Chicago? Call Z Chicago.

Finding the right apartment in a sprawling city like Chicago can seem like a daunting task. Z Chicago can help. We have access to both professionally-managed apartment buildings and privately listed rentals across the city.

Contact Z Chicago at 312-810-2295 to start searching for the best deals on luxury Chicago apartments today.