Landlord tips & tricks
April 12, 2023

What is a Rent Concession?

Steadily's blog cover page for information around landlord insurance.

If you're a landlord, it's important to understand all aspects of your rental property, including rent concessions. A rent concession is an agreement between the landlord and tenant that allows the tenant to pay less rent for a specified period, usually in exchange for something like signing a longer lease or taking care of certain maintenance tasks. While rent concessions can be beneficial in some situations, they can also have significant implications for your landlord insurance policy.

For many landlords, insurance is an essential component of protecting their investment property. However, failing to understand how rent concessions can impact your coverage can leave you vulnerable to financial loss. That's why it's important to learn about rent concessions and how they relate to landlord insurance.

Key Takeaways:

  • Rent concessions are agreements in which tenants pay less rent for a specified period in exchange for something like a longer lease or taking care of certain maintenance tasks.
  • Understanding rent concessions is crucial for ensuring you have adequate protection for your rental property through landlord insurance.
  • Failure to understand how rent concessions can impact your coverage can leave you vulnerable to financial loss.

What is Rent Concession?

A rent concession is an agreement between a landlord and tenant to reduce or waive certain terms of a rental agreement. It typically refers to a reduction in rent, but it can also include waiving fees, offering additional incentives such as free services, or providing items of value to the tenant.

Rent concessions are often used by landlords as a way to attract tenants and make their property more marketable. For example, if the market rate for rent in an area is high, a landlord may offer a rent concession in order to entice potential tenants. Rent concessions can also be used when there is high demand for rental properties and landlords are competing for prospective tenants.

Insurance for landlords is a complex field, and rent concessions can make it even more so. It's essential to work with an insurance professional who understands rent concessions and their impact on your coverage. By doing so, you can ensure that your insurance policy is tailored to your unique situation.

Types of Rent Concessions

Let’s explore the different types of rent concessions that you can offer to help you attract more tenants to your property.

1. Offering a Free Month's Rent

One of the most common types of rent concession is offering a free month's rent. This type of concession gives tenants an incentive to move in quickly and start their rent-free period right away. Free rent is particularly effective when you're trying to fill a vacancy fast.

2. A Reduction in Rent

Another type of rent concession is offering reduced rent. This is particularly beneficial for tenants who may be struggling financially or who are looking for a more affordable rental property. Offering reduced rent can also help you attract longer-term tenants who are looking for a stable living situation.

3. Security Deposit Reduction

Security deposits can be a significant financial burden for some tenants, particularly those who may be moving on short notice. To make your rental property more attractive to potential tenants, consider offering a reduced security deposit or even waiving the security deposit altogether.

4. Moving Cost Assistance

Moving costs can add up quickly for tenants, and offering to help with these costs can be a strong incentive for someone to consider your rental property. Consider offering to cover the cost of a moving truck or even hiring professional movers for your tenants.

5. Property Upgrades

Upgrades to the rental property can be a significant draw for potential tenants. Consider upgrading appliances, adding in-unit laundry, or even renovating the kitchen or bathroom to make your rental property more attractive.

6. Free Amenity Access

Offering free access to amenities like a gym, pool, or community center can be a strong incentive for potential tenants. This type of concession is particularly effective for larger rental properties or those located in luxury neighborhoods.

7. Pay the Broker's Fee

Broker's fees can be a significant financial burden for tenants, particularly in high-cost rental markets. Offering to cover the cost of the broker's fee can make your rental property more attractive to potential tenants.

Consider offering tenants a gift card to a local restaurant, a home-cleaning service, or even a gym membership. These types of concessions can be a strong draw for busy professionals or those looking for a more luxurious living situation.

Rent concessions are an important consideration for landlords

When Should Landlords Offer Rent Concessions?

You should offer rent concessions when you have a prolonged vacancy and cannot find a tenant when an existing tenant's lease is up for renewal, or if you are renting out a large property for the first time.

It is also necessary to note that rent concessions are also typically used when there are more rental units available than interested tenants in an area. By offering concessions, you can entice current tenants to renew their leases. In addition, you can attract new renters who benefit from concession savings. As we mentioned before, rent concessions can also be structured in various ways to meet the needs of both landlords and tenants. This means you have a lot of flexibility in utilizing rent concessions to your advantage.

Tips for Offering Rent Concessions

Here we've compiled some tips that will help you use rent concessions to your advantage.

Tip # 1: Research Competitors in Your Areas

Before offering rent concessions, you want to know what your competitors are already offering. Check out the rental prices of other properties in the area and determine how your price compares. See what kinds of discounts or concessions they offer to their tenants. Doing so will provide you with a baseline understanding of what you can offer.

Tip # 2: Evaluate Tenant Needs

By understanding tenant needs, you can offer concessions that will genuinely help them. For instance, if you are renting to students, offering a discount during exam periods could be an attractive offering to them. In contrast, working professionals might require flexible rent payments that don't interfere with their payment schedules. By understanding tenant needs, you can create rent solutions that are useful for them.

Tip # 3: Find the Right Time

The timing of your rent concessions is critical. For example, offering discounts or concessions during lease renewal dates is timely since tenants are already in decision-making mode. Advertise the discount or concession a couple of months before the lease renewal date. This way, tenants will have ample time to decide if they intend to stay or leave.

Tip # 4: Be Transparent

Any rent concession agreement should have your terms and conditions clearly expressed. Make sure the agreement is in writing; this will protect you and your tenants from any future misunderstandings. Your tenants should know the amount of the concession and for what period it lasts. This way, tenants know what they stand to gain, and you have a well-understood and transparent rental process.

Tip # 5: Keep an Eye on Your Bottom Line

Rent concessions shouldn’t put a significant dent in your profit margin. Consider only providing concessions to financial-sound tenants. Also, ensure the length of rent concessions for new tenants is not too long, so your revenues are not significantly impacted. Most importantly, make sure to track the cost and returns of concessions so you can evaluate when to end it.

The Basics of Landlord Insurance

As a property owner, protecting your investment is crucial. That's where landlord insurance comes in. This type of insurance is designed specifically for rental properties and provides coverage for damages, liability, and loss of income due to unforeseen circumstances.

Landlord insurance can also be referred to as rental property insurance or property owner insurance. The coverage options can vary based on the insurance provider and the needs of the property owner. Some common types of coverage included in a landlord insurance policy are:

  • Property damage coverage: This covers damages to the physical property caused by perils such as fire, wind, hail, or vandalism.
  • Liability coverage: This protects the property owner from legal claims and lawsuits by covering things like medical expenses or property damage that occurs on the rental property.
  • Loss of rental income coverage: This provides coverage for lost rental income due to damage that makes the property uninhabitable.

It's important to note that landlord insurance is not the same as homeowner's insurance. Homeowner's insurance is designed to cover a primary residence and may not provide adequate coverage for a rental property.

When shopping for landlord insurance, it's essential to consider the type and level of coverage needed. Some factors that may affect your coverage needs include the value of the property, the age of the property, and the location of the property.

Landlord Coverage and Tenant Insurance

It's also important to note that landlord insurance does not cover the personal belongings of tenants. It is recommended that tenants obtain their own renter's insurance policy to protect their personal property in case of theft, damage, or loss. Encouraging tenants to purchase renter's insurance can also benefit the landlord by reducing the likelihood of tenant lawsuits related to property damage or loss.

Having a solid understanding of landlord insurance is essential for protecting your rental property. By investing in the right type and level of coverage, you can have peace of mind knowing your investment is protected.

Rent Concessions and Coverage Options

When it comes to landlord insurance policy, it's essential to consider the impact of rent concessions on your coverage options. A rent concession is a discount offered to a tenant on their rent for a specified period. It's a strategy employed by landlords to keep their tenants and maintain occupancy rates.

While rent concessions can benefit both landlords and tenants, they may also have implications for insurance coverage. Some landlord insurance policies may exclude rent concessions or limit coverage for losses occurring during a concession period. Landlords should be aware of these potential limitations and evaluate their policy options carefully.

How Rent Concessions Affect Coverage

Landlord insurance policies typically cover losses resulting from property damage, liability claims, and loss of income due to tenant eviction or abandonment. However, if a tenant is paying reduced rent due to a concession, it may impact the coverage. For instance, if a fire damages the property during a rent concession period, the insurance may only cover the actual rental income received instead of the full rental value.

Furthermore, if a tenant's reduced rent payment causes a landlord to lose income, this loss may not be fully covered by insurance. It's important to review your policy carefully and consult with your insurance provider to understand any limitations or exclusions that may apply.

Considerations for Rental Properties

Rent concessions may be more common in certain types of rental properties, such as apartments or vacation rentals, and may impact insurance coverage differently. For instance, if a landlord offers a discount to a long-term tenant in an apartment building, the insurance policy may only cover the actual rental income received by the landlord instead of the full amount of rent for the unit.

On the other hand, if a landlord offers a rent concession on a vacation rental property, the policy may limit coverage during the concession period due to the higher risk of property damage and liability claims. Vacation rentals may also have different insurance requirements than long-term rentals, so it's important to review your policy in detail.

Policy Options for Rent Concessions

Landlords should evaluate their coverage options based on the risks associated with rent concessions and their specific property type. Some insurance providers may offer policies that include coverage for rent concessions, while others may require landlords to purchase additional endorsements or riders to cover these situations.

Additionally, landlords may consider increasing their loss-of-rent coverage or liability insurance to compensate for any extra risks associated with rent concessions. Seeking guidance from an insurance professional can also help landlords make informed decisions about coverage options and ensure adequate protection for their rental properties.

Assessing Risk and Evaluating Impact

When offering a rent concession, you must be aware of the potential impact on your landlord insurance. Rent concessions can result in higher risk factors and increased liability for both property owners and tenants. Therefore, assessing the risk and evaluating the impact on your landlord insurance is crucial.

Many landlords assume that their existing landlord insurance policy covers rent concessions. However, this is not always the case. In some cases, the insurance policy includes exclusions, leaving the landlord exposed to risk and liability.

Landlord Liability Insurance

One essential aspect of landlord insurance is liability coverage. Liability coverage protects landlords from any legal or financial damages that may arise from injuries or damages that occur on the rental property. When it comes to rent concessions, landlords must ensure that their liability coverage is adequate to cover any potential risks or liabilities.

For example, imagine a scenario where a tenant is given a rent concession for a damaged roof but is injured due to a collapsed ceiling. In this case, the landlord may face legal and financial implications. However, if the landlord has adequate landlord liability insurance, they can protect themselves from such situations.

Risk Assessment

Assessing risk is crucial for landlords when evaluating the impact of rent concessions on their insurance policy. Some risks may include financial loss, property damage, and legal liabilities. Landlords must identify potential risks, evaluate their impact, and take proactive steps to mitigate them.

One way landlords can mitigate risks is by requiring tenants to have renters insurance. Renters insurance protects tenants from theft, damage, or injury on the rental property. When tenants have renters insurance, landlords can transfer some of the risk to the insurance companies and minimize their exposure to liability.

Impact Evaluation

Evaluating the impact of rent concessions on your landlord insurance policy allows you to determine the appropriate level of coverage needed. To evaluate the impact, landlords must understand the full context of their rent concession agreement, including terms, length, and impact on property condition.

For example, a landlord who provides a rent concession for a tenant to make necessary repairs or renovations must evaluate the impact on the property's overall condition. A property in poor condition increases the risk of damages and legal liabilities. Therefore, the landlord must be aware of the potential impact on their insurance policy if something goes wrong.

Strategies to Mitigate Risk

Being a landlord comes with inherent risks, and offering rent concessions can further complicate things. However, with the right strategies in place, you can protect yourself and your investment property while still attracting desirable tenants.

Invest in Comprehensive Landlord Insurance

One of the most important strategies for mitigating risk as a landlord is to invest in comprehensive landlord insurance. A robust insurance policy can help protect against property damage, liability claims, and other unforeseen events that could impact your rental income. When offering rent concessions, make sure your insurance policy covers any additional risks and liabilities that may arise.

Screen Tenants Carefully

Proper tenant screening is essential to protect yourself as a landlord. When offering rent concessions, ensure that applicants meet your remaining criteria. Avoid accepting tenants who have a history of eviction or frequently change their address. Credit and background checks can be invaluable tools when evaluating potential tenants.

Be Clear and Transparent

When offering rent concessions, it's important to be transparent with your tenants. Clearly communicate the terms and conditions upfront, including any restrictions or limitations. This helps avoid misunderstandings and ensures that both parties are on the same page. Put everything in writing and have a signed agreement.

Regular Inspections

Regular inspections of your rental property can help you identify potential issues early on. This can include everything from minor maintenance issues to more serious problems like water damage or pest infestations. By addressing problems quickly, you can minimize damage and prevent liability claims.

Hire Professionals

When in doubt, seek professional advice. Consider consulting with an attorney, accountant, or insurance professional to ensure you have the right landlord insurance and liability coverage in place. By working with experts, you can avoid costly mistakes and protect yourself and your investment.

Note: While these strategies can help mitigate risk, they are not foolproof. Always be prepared for unexpected events and ensure that you have the necessary protections in place to safeguard your rental property.

Understanding Policy Exclusions

While rent concessions can be a valuable tool for attracting tenants, they can also lead to policy exclusions in landlord insurance. It's essential to understand these exclusions to ensure you have comprehensive coverage for your rental property.

Common Policy Exclusions

One of the most common policy exclusions relating to rent concessions is non-payment of rent. If a tenant fails to pay rent, and a rent concession was applied, the insurance company may exclude coverage for any resulting damage or loss.

Other policy exclusions may include damage caused by a tenant's illegal activities, intentional damage to the property, and damage caused by natural disasters such as floods or earthquakes. It's crucial to carefully review your insurance policy to understand any exclusions that may be relevant to your rental property.

Implications for Coverage

Policy exclusions can have significant implications for your coverage in the event of a claim. If your policy excludes a specific type of damage or loss, you may be responsible for covering the cost of repairs or replacement out of pocket.

Failing to understand policy exclusions can leave you vulnerable to financial losses, so it's essential to work with an experienced insurance professional to review your policy and ensure you have the coverage you need.

Reviewing and Modifying Your Policy

Regularly reviewing and modifying your landlord insurance policy is crucial, especially when dealing with rent concessions. By doing so, you can ensure that your coverage is up-to-date and adequate for your needs. Here are some tips to help you review and modify your landlord insurance policy:

1. Assess your coverage needs

Before making any modifications to your policy, it is important to assess your coverage needs. Take into account any changes in your rental property, such as renovations or upgrades, as well as any changes in your tenants or rental agreements. This will help you determine whether your current coverage is still adequate or if modifications are necessary.

2. Understand the terms of your policy

Make sure you understand the terms of your landlord insurance policy, including the coverage options, policy limits, and deductibles. This will help you identify any gaps in your coverage and make informed decisions about modifications.

3. Consult with your insurance provider

Consulting with your insurance provider can help you understand your policy and make any necessary modifications. They can also advise you on the best course of action when it comes to rent concessions, ensuring that you have adequate coverage in place.

4. Consider increasing your coverage

If you are offering rent concessions, it may be wise to consider increasing your coverage to protect your investment property. This could include increasing your liability coverage or adding coverage for specific risks, such as damage caused by tenants or natural disasters.

5. Keep your policy up-to-date

Make sure to keep your landlord insurance policy up-to-date with any changes in your rental property or rental agreements. This will ensure that your coverage remains relevant and adequate for your needs.

6. Review your policy regularly

Regularly reviewing your landlord insurance policy can help you identify any gaps in your coverage and make any necessary modifications. It is recommended to review your policy at least once a year or whenever there are significant changes to your rental property or rental agreements.

Case Studies and Real-Life Examples

Real-life scenarios can provide valuable insights into how rent concessions can impact landlord insurance. By examining these cases, you can better understand the risks, pitfalls, and strategies for mitigating them.

Case Study 1: Late Rent and Damages

A landlord offers a rent concession to a tenant who is struggling to pay rent on time. Unfortunately, the tenant fails to pay rent altogether, and the landlord has to file for eviction. During the eviction process, the landlord discovers significant damages to the property, including broken windows, damaged doors, and holes in the walls.

The landlord files an insurance claim, but the claim is denied due to the rent concession. The landlord's insurance policy states that any rent concessions void the coverage for damages caused by the tenant.

This case highlights the importance of carefully reviewing the policy and understanding how rent concessions can impact coverage options. Landlords should consider alternative approaches to rent concessions, such as partial payments or deferred payments, to ensure they maintain coverage for damages.

Case Study 2: Rent Reduction and Liability

A landlord reduces the rent for a tenant in exchange for the tenant agreeing to maintain the property's landscaping and make necessary repairs. The tenant agrees, but fails to fulfill their end of the bargain, resulting in the property's landscaping becoming overgrown and unsightly.

One day, a visitor to the property trips and falls on a loose brick in the walkway, injuring themselves. The visitor files a lawsuit against the landlord for negligence in maintaining the property.

The landlord files an insurance claim, but the claim is denied due to the rent concession and liability exclusions in the policy. The landlord is left to pay for legal fees and damages out of pocket.

This case highlights the importance of understanding the risks associated with rent concessions and ensuring that the landlord insurance policy covers liability. Landlords should consult with an insurance professional to review their policy and make any necessary modifications.

Real-Life Example: COVID-19 Rent Concessions

In response to the COVID-19 pandemic, many landlords offered rent concessions to tenants facing financial hardships. These concessions ranged from rent reductions to deferred payments to outright forgiveness.

However, such concessions can impact the landlord insurance policy's coverage options, leading to policy exclusions or increased premiums.

For example, if a landlord offers rent forgiveness to a tenant who subsequently causes damage to the property, the insurance claim may be denied due to the rent concession. Alternatively, if a landlord reduces the rent without modifying the insurance policy, the policy may not cover the reduced rental income in case of a loss.

Landlords should review their insurance policy and consult with an insurance professional to ensure they have adequate coverage for rent concessions during the COVID-19 pandemic.


Rent concessions can be a tricky concept to understand, especially as a landlord. However, understanding what rent concessions are and when they can be given is essential knowledge – especially since they can significantly impact your cash flow.

Protecting your rental property through comprehensive landlord insurance is vital for any property owner. Rent concessions can impact your coverage options and increase your liability risks, so it's crucial to understand the implications and take proactive steps to mitigate those risks.

By conducting regular evaluations of your insurance policy and seeking guidance from an insurance professional, you can ensure that you have adequate protection in place. Additionally, utilizing strategies to mitigate risk, such as having proper landlord protection and liability coverage, can help you avoid costly losses.

Thankfully, this guide has given you all the necessary information to help you make educated decisions when it comes to granting any rent concessions. Keep in mind that grants and exemptions still need to remain within legal boundaries and should align with both fair housing practices and applicable laws. By understanding the rationales for rent concessions, staying organized, helping tenants where applicable, being aware of any restrictions or limits in place, and providing an agreement in writing prior to the enactment of rent concessions -  as a landlord, you will have the tools and knowledge you need to ensure your decisions are ethical, profitable and successful.

Table of Contents

What is Rent Concession?

Types of Rent Concessions

When Should Landlords Offer Rent Concessions?

Tips for Offering Rent Concessions

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