Discounted Rent at Your Companies Properties?
Hi all-
I am curious to hear what kind of discounts you may be offered at properties that your company owns? Am I ignorant to think that if a property in your portfolio is consistently 5-6-7+% vacant, why would they not offer steep discounts to their employees? I believe my company offers something like a 10% discount on rent, which imo is nothing. That is not nearly enough for me to move into one of our buildings. Maybe I’m just a cheap bastard that likes to save and not spend a fortune on rent. But i feel like renting a couple of units at 50% off to your employees wouldn’t hurt. After all, income is income.
Am I an idiot to think like this? Curious to see what others think.
Cheers.
Based on the most helpful WSO content, offering discounted rent to employees at properties owned by their company is not uncommon, but the extent of the discount varies widely. A 10% discount, as you mentioned, is relatively modest and might not be enough to incentivize employees to move into those properties, especially if the market vacancy rate is high.
From a business perspective, steep discounts like 50% off might not be feasible for most companies, as it could set a precedent that undermines the perceived value of the property and impact overall revenue. However, offering more competitive discounts during periods of high vacancy (e.g., 5-7% or more) could be a strategic move to fill units and generate some income rather than leaving them empty.
In some cases, companies might also consider other perks, such as waiving application fees, offering a few months of free rent, or including additional amenities to make the offer more attractive without drastically cutting the rent.
Your thought process isn't unreasonable—it's a valid point that income is income, and filling vacant units with employees at a discount could be a win-win. However, the decision ultimately depends on the company's financial strategy, market conditions, and how they balance employee benefits with maintaining property value.
Sources: Q&A: Affordable Housing Acquisitions, I'm long office properties, Explain Affordable Housing?, Page to log into your Wall Street Oasis member account., Apartment Renewal Negotiating Tips
Assuming we're talking multifamily here:
A number of apartment REITs will offer 20% off of rent if you live in one their building as a tax-free benefit. IRS rules, last I checked, say that a Qualified Employee Discount can be no more than 20% of the market value charged to non-employees.
https://www.irs.gov/publications/p15b
A company can offer more than 20%, but then you're getting into taxable territory (see: paying all the rent for your maintenance super to live on-site, that has to show up on their taxes) and most shops don't want to deal with that headache unless you're critical on-site staff. I'm less certain how this all works if your company owns the building but utilizes a 3rd party operator.
...but 10% seems pretty weak IMO.
I work a big institutional player and all I got offered was a waived deposit lol
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