Lately, Boston renters have been talking about the massive increase in rents over the past two years, specifically in full-service luxury buildings. This is understandable considering the eye-popping price tags in some of Boston’s newer buildings where 1-bedroom units can fetch upwards of $3,000/month and 2 bedrooms often exceed $4,000/month. If you happen to be one of the few people who wants a 3 bedroom…let’s just say you might have to double down on your student loans to afford it.
However, like watching coverage of the current presidential election, don’t always believe what you see. According to The Boston Globe, the vacancy rate in Boston apartment buildings remained above 5% for the fourth straight quarter. There are a couple of reasons for this. The first is that more than 3,800 apartments opened in Boston in 2015, which eased the growing tension between the increasing population of renters and decreasing Boston inventory. The second is that many tenants who once lived in Boston have been priced out of newer buildings and have moved to cheaper rental markets outside of the city.
What happens when vacancy rates increase? Developers are forced to adjust pricing and increase tenant incentives in order to keep occupancy above 95%. With 5,000 more apartments permitted for construction in 2016, tenant incentives should run rampant through Boston’s new developments. What does this mean for you? For starters it could mean one or more months in free rent, garage parking included and no broker’s fee. One example is Fuse Cambridge, which is offering 1.5 months in free rent and paying broker’s fees for tenants. Another is at the brand new Ava Theater District, which is offering two months free rent on 2 bedroom units and up to two months free on studio and 1-bedroom units, as well as paying full fee to brokers. There are also various buildings in Downtown Boston and the Back Bay that are not new construction but are still offering multiple months in free rent to new tenants.
In a nutshell, if a 1-bedroom in a new construction luxury apartment building is $3,000/month and you get two months free, that’s $6,000 off throughout the course of the year or $500/month less than the sticker price of the apartment. If you factor in not having to pay a broker’s fee, (most buildings pay your broker for you), that is an additional $3,000 off, or $250/month in savings. When it’s all said and done, you could have that brand new 1-bedroom in a luxury apartment building for $2,250/month! Considering the average rent in Boston is around $2,100 per month, this is a relative steal in the grand scheme of the Boston rental market. So ignore the hype and rent the apartment of your dreams, it could be more attainable than you think!