Landlord incentives play an important role in attracting tenants, especially in competitive rental markets. From rent-free periods to property upgrades, these incentives can make a listing stand out. As rental trends shift in cities like Sydney and Melbourne, more landlords are offering perks to secure leases. But what do these incentives really mean for tenants, and how can they make the most of these offers?
Landlord Incentives to Attract Tenants
Landlord incentives are benefits provided to entice tenants into signing a lease. Common incentives include:
- Rent-Free Periods – Offering a set duration without rent payments, often at the lease’s commencement.
- Utility Inclusions – Covering costs such as electricity, water, or internet services.
- Reduced Rent – Lowering the monthly rental rate for a specified period.
- Property Upgrades – Enhancements or additions to the property, like new appliances or renovations.
These incentives can make a property more appealing, especially in competitive markets or areas with higher vacancy rates.
Sydney and Melbourne Rental Prices Drop with Tenant Incentives
Australian property portal PropTrack’s October 2024 report took note of downturns in Sydney and Melbourne properties, including which suburbs have properties with incentives attached.
Sydney
The study noted that the eastern suburbs had median house rent prices going down 3.2 per cent overall.
PropTrack figures showed some of the biggest rent falls over the October quarter were in Sydney’s eastern suburbs, where median rent on houses dropped 3.2 per cent over three months. The Southern Highlands and Shoalhaven saw median apartment rents decrease by 3.5 per cent, while Ryde experienced a 3.4 per cent drop. The North Shore saw a 2.5 per cent slip in rental prices.
Some Sydney agents also caught wind of perks offered to tenants. One rental property in Kensington was listed at $894 per week, with the first four weeks rent-free. It was also the same for a certain three-bedroom apartment in Mascot, where tenants who booked a one-year lease will have the first month free. Other properties in Penrith, Cabramatta, Lidcombe, and Punchbowl, to name a few, had two weeks’ free rent offered.
Melbourne
Melbourne properties may be expensive, but in some inner-city areas, median apartment rents declined by an average of 1.8 per cent. When you look at the properties, though, the incentives make the slight dip become more valuable.
For example, Mirvac’s LIV Aston build-to-rent complex in North Wharf Docklands is offering new tenants two months’ free rent. The complex offers three-bedroom apartments with city views for a weekly rent of $1,570. When you consider two months without any rental obligations, that amounts to nearly $13,000. However, the offer is set to expire on 28 February 2025.
Like those mentioned for Sydney, there were also properties to let in Melbourne that had two weeks’ free rent, in Mernda, Essendon, and the CBD.
Tenant Guide to Landlord Incentives
While landlord incentives can offer financial relief or added conveniences, let’s look at the situation from a tenant’s perspective. Tenants should assess the overall value and long-term implications.
Lease Terms
Ensure that the lease duration and conditions align with your personal and financial circumstances.
Market Comparison
Compare the incentivised property’s rent and features with similar properties in the area to determine genuine value.
Future Rent Increases
Be aware of potential rent hikes after the incentive period ends. Some tenants may get too complacent in the sense the landlord may assume an extension of the incentives when they have not stated anything at all, even in the rental contract!
Property Condition
Assess whether the property meets your standards and if any promised upgrades are completed before moving in.
Tenant Responsibilities for Property Care
Maintaining a rental property responsibly helps ensure a comfortable living space and a good relationship with the landlord. Below are key tenant responsibilities to keep in mind.
Regular Cleaning
Keep the property clean to prevent damage and maintain a healthy living environment.
Prompt Reporting
Inform the landlord or property manager of any maintenance issues promptly to prevent further deterioration.
Respectful Use
Use appliances and fixtures as intended to avoid unnecessary wear and tear.
Gardening
If applicable, maintain gardens and outdoor areas as specified in the lease agreement.
Adhere to Lease Terms
Follow all lease conditions, including policies on pets, smoking, and alterations to the property.
By maintaining the property diligently, tenants can foster a positive relationship with landlords, which may be beneficial for lease renewals or securing favourable references in the future.
Conclusion
Landlord incentives can provide valuable benefits for tenants, from financial relief to added conveniences. However, it’s essential for renters to assess the true value of these offers by considering lease terms, potential rent increases, and property conditions. As rental markets in cities like Sydney and Melbourne evolve, incentives may continue to shape tenant decisions. By staying informed and making thoughtful choices, tenants can secure the best possible living arrangements while maintaining a positive relationship with their landlords.
DISCLAIMER: This article is for informational purposes only. 2 Ezi has no relationships with any rental agents or industry portal. 2 Ezi cannot aid in any property rental negotiations and does not accept referral fees for any listing highlighted here. Please discuss rental plans with your agent and financial advisor.
