The reset is not an increase
It looks like one on the letter. It isn't.
If you signed with two months free, your effective rent in year one was well below what the unit actually rents for. See true monthly cost for how that number is built. In month thirteen, you go back to the asking rent, plus whatever the market did over the year.
That's why the rent on a lease that felt like a good deal in month one can jump several hundred dollars in month thirteen. The jump is about what the concession took off each month.
The math
$1,400 asking rent, 12 month lease, six weeks free.
- Daily rate: $46.03
- Concession: 42 days × $46.03 = $1,933
- Effective monthly, year one: about $1,239
At renewal, with no concession and the asking rent flat, the offer is $1,400. That reads as a $161 increase. Really, the unit always cost $1,400, and year one was on sale.
Now add what the market did. If asking rent went up 3%, the offer is $1,442, and it feels like a $203 increase.
Neither number should surprise you if you asked the right questions at signing.
The two questions
1. What did this unit renew at last year?
Properties can usually answer, and that tells you more about how they handle renewals than any market average. A building that renewed at 4% last year is telling you something about this year.
2. Does the concession repeat at renewal?
Sometimes there's a smaller renewal concession. Often there's none. Ask before you sign year one, since the answer tells you whether to compare costs over one year or two.
Look at two years, not one
Year one at $1,239 effective and year two at $1,442 averages $1,340 over 24 months. A building asking $1,300 with no concession and a modest renewal is cheaper over the same period. Look only at year one, and you'd miss that.
Timing and the notice clause
Renewal offers usually show up 60 to 90 days before your lease ends. Your lease sets a separate deadline for telling the property you're moving out, often 30 or 60 days. Look for the number of days in your lease.
Miss the notice deadline and you can end up on a monthly rate. That rate usually runs well above the renewal offer and the market. It's the most expensive way to be undecided.
Put the notice deadline on your calendar the day you sign. Don't wait for the month it comes up.
What to do when the offer lands
- Figure out what you actually paid in year one: effective rent plus the community fees.
- Get the renewal number plus any fee changes.
- Compare it to this month's effective rent at two or three similar buildings nearby.
- Add up what moving would cost: application fees, deposit, movers, utility setup, any overlap.
- Decide, with the notice deadline in front of you.
That's the whole method, and the renew or move page covers each step. If your numbers say renew, we'll tell you to stay, and we earn nothing that day.
Price both sides of a renewal the same way, and true monthly cost shows how to build each one.