Free rent or lower rent: which concession costs you less
“A tenant is asking for a deal and I don't want to hurt my property's value.”
By Jose Eduardo Hernandez · REALTOR®, KW Commercial · Nov 2026
When a tenant asks for a concession, you usually choose between a few months free up front or a lower rent for the whole term. They can cost about the same in total, but they don't affect your property the same way.
Buyers and lenders often value a property on its rent. A lower rent for the full lease lowers that number for years. Free rent at the start keeps the face rent higher, which tends to protect value if you sell or refinance.
Free rent also helps the tenant when they need cash most: while they're opening.
How to decide:
- Add up the total rent over the term under each offer.
- Ask whether you might sell or refinance during the lease.
- If so, lean toward free rent up front and keep the face rent strong.
Get the concession written so it's lost if the tenant defaults early.
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General information for Illinois owners, buyers and sellers, not legal, tax or lending advice. Every property and lease is different; talk with an attorney, accountant or lender about your situation.