5 ms·

If you are trying to rent right now the going rate seems to be 2 months free for a 12month contract. So almost 20% off. I think the reason for the 2 months fre

If you are trying to rent right now the going rate seems to be 2 months free for a 12month contract. So almost 20% off. I think the reason for the 2 months free is to avoid various rent controls. If they actually gave 20% off they couldn't put the price back up 20% in the future as easily.

amiga_500 6y ago
Exactly. It's not 20% off. Make them drop the monthly rent by 20%. That is 20% off.
- icelancer 6y ago
  Drop rent control and they might.
  - neilparikh 6y ago
    Even without rent control, the "2 months free" offer earns them more revenue, assuming you stay over an year, so I doubt they would just give you the full discount.
    - hammock 6y ago
      Or if you stay less than a year! Since you usually have to pay back concessions ON TOP of any early termination penalty, if you want to break your lease.
  - smoothdeveloper 6y ago
    Let the place remain tenantless few more months and they will.
jeffbee 6y ago
At least in my jurisdiction the free months are averaged in to the rent control so in the second year the rent will actually decrease.
gkop 6y ago
Regarding SF rent control: this commenter sounds like they know what they're talking about and say that landlords in SF cannot beat rent control with temporary free rent offers: https://socketsite.com/archives/2020/06/complimentary-rent-on-the-rise-in-san-francisco.html#comment-394729 https://socketsite.com/archives/2020/06/complimentary-rent-o...
- jedberg 6y ago
  They're wrong. The new rent control law (effective Jan 1, 2020) specifically excludes temporary discounts from the base rate calculation. See section 1947.12: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
  - srini 6y ago
    This is a state law and it still allows for stricter city level rent control. If the unit is bound under the stricter SF city rent control, the city rent control law may treat discounts differently?
    - jedberg 6y ago
      SF does not count discounts in the base rent: https://sfrb.org/section-372-definitions https://sfrb.org/section-372-definitions
    - shuckles 6y ago
      The state law does not apply to units that are rent controlled by existing city ordinances.
  - mistersquid 6y ago
    > landlords in SF cannot beat rent control with temporary free rent offers > specifically excludes temporary discounts from the base rate calculation I think you two (three, including "this commenter") are in agreement…
couradical 6y ago
I actually think that the tax treatment differs as well - the 2 months free can be treated as a marketing expense, whereas the reduced rent simply results in the lower revenue. For financed buildings it also keeps the nominal value of the building at the same level - it's still technically "rented" for the same rate, keeping future cash flow projected the same.

amiga_500 6y ago

Exactly. It's not 20% off. Make them drop the monthly rent by 20%. That is 20% off.

icelancer 6y ago
Drop rent control and they might.
- neilparikh 6y ago
  Even without rent control, the "2 months free" offer earns them more revenue, assuming you stay over an year, so I doubt they would just give you the full discount.
  - hammock 6y ago
    Or if you stay less than a year! Since you usually have to pay back concessions ON TOP of any early termination penalty, if you want to break your lease.
- smoothdeveloper 6y ago
  Let the place remain tenantless few more months and they will.

jeffbee 6y ago

At least in my jurisdiction the free months are averaged in to the rent control so in the second year the rent will actually decrease.

gkop 6y ago

Regarding SF rent control: this commenter sounds like they know what they're talking about and say that landlords in SF cannot beat rent control with temporary free rent offers: https://socketsite.com/archives/2020/06/complimentary-rent-on-the-rise-in-san-francisco.html#comment-394729 https://socketsite.com/archives/2020/06/complimentary-rent-o...

jedberg 6y ago
They're wrong. The new rent control law (effective Jan 1, 2020) specifically excludes temporary discounts from the base rate calculation. See section 1947.12: https://leginfo.legislature.ca.gov/faces/billTextClient.xhtml?bill_id=201920200AB1482 https://leginfo.legislature.ca.gov/faces/billTextClient.xhtm...
- srini 6y ago
  This is a state law and it still allows for stricter city level rent control. If the unit is bound under the stricter SF city rent control, the city rent control law may treat discounts differently?
  - jedberg 6y ago
    SF does not count discounts in the base rent: https://sfrb.org/section-372-definitions https://sfrb.org/section-372-definitions
  - shuckles 6y ago
    The state law does not apply to units that are rent controlled by existing city ordinances.
- mistersquid 6y ago
  > landlords in SF cannot beat rent control with temporary free rent offers > specifically excludes temporary discounts from the base rate calculation I think you two (three, including "this commenter") are in agreement…

couradical 6y ago

I actually think that the tax treatment differs as well - the 2 months free can be treated as a marketing expense, whereas the reduced rent simply results in the lower revenue. For financed buildings it also keeps the nominal value of the building at the same level - it's still technically "rented" for the same rate, keeping future cash flow projected the same.