As a multifamily property owner, the lease-up period is a crucial step in turning your investment into a viable income stream. With the property ready to welcome tenants, stabilization is still a process that will take an average of 12-18 months (even for those more seasoned property owners and managers).
However, there are some time-tested strategies (and some unconventional strategies, too) that can help shorten the path to stabilization. Did you know that a growing number of multifamily property owners are renting their vacant units and parking spaces to non-residents during the lease-up period? This is a great way to 1) bridge revenue gaps and 2) attract potential leads to the property.
When you implement any number of these strategies, you’ll be able to reach your occupancy and revenue targets even sooner than you initially forecasted.
How Long Is the Average Lease Up Duration
The average lease-up period for a multifamily property is typically 12 to 18 months. However, with the right marketing strategies, this process can sometimes be completed in as little as 6 to 12 months. While ultimately out of your control, a thriving economy and local job market can also accelerate the lease-up period, especially for properties located near major office complexes or universities.
Competition is another key factor that will determine the length of your property’s lease-up period. If your multifamily property is located in an area with a high concentration of new developments or existing multifamily properties, you’ll be at greater risk of losing out to a competitor. Additionally, you won’t be able to cite “prime location” as a top amenity and reap the same results that you would in an area with a low concentration of multifamily vacancies. Instead, you’ll need to study your competitors under a much closer lens. What amenities do you have that they don’t? A rooftop space? Once you’ve pinpointed those unique amenities, spotlight them in your property’s marketing materials.
Remember: the length of your lease-up period is (usually) directly proportional to your marketing efforts. Put more into marketing, and you’ll get more tenants out of it.
| Leasing Strategy | Average Lease-Up Duration (Months) | Target Stabilization Occupancy | Cost Implications |
| Aggressive Marketing & High Incentives | 6-8 months | 95%+ | High marketing and incentive costs but faster stabilization |
| Moderate Marketing & Targeted Incentives | 8-12 months | 90-95% | Moderate costs with a balanced timeline |
| Minimal Marketing & No Incentives | 12+ months | 85-90% | Low cost but extended stabilization period |
How Will We Know Stabilization Has Been Reached?
The lease-up stage will end when the occupancy rate gets to the 90 to 95% mark. At this point, you’ll notice improved cash flow and a stabilized net operating income. As a property manager or property owner, these are some important signs to look for when the lease-up period is coming to a close.
| Stabilization Metric | Description |
| Occupancy Rate | Typically 90-95% occupancy, indicating a steady tenant base with minimal vacancies. |
| Consistent Cash Flow | Monthly rental income consistently covers all operating expenses, creating a predictable cash flow. |
| Turnover Rate | Lower turnover rates suggest stable tenant retention and longer-term leases. |
| Reduced Leasing Costs | Leasing and marketing costs decrease as units fill, with less need for incentives. |
| Net Operating Income (NOI) | NOI stabilizes, meets, or exceeds the property’s financial projections. |
| Market Rent Adjustments | Rents align with market rates as initial lease-up discounts phase out, signaling stable demand. |
Common Challenges During the Lease-Up Period and How to Overcome Them
All experienced property management teams and owners have experienced difficulty attracting residents at some point in their careers. If you are struggling to fill vacant units and run into any of these challenges, here are a few solutions worth considering.
| Challenge | Solution |
| Low Initial Tenant Interest | Increase exposure through digital ads, hosting community events, and partnering with local businesses. |
| High Competition in the Area | Offer flexible lease terms, incentives, or discounted parking/storage options to make the property more appealing. |
| High Leasing and Marketing Costs | Utilize referral programs, self-guided tours, and virtual showings to reduce costs and attract tenants efficiently. |
| Managing Follow-Ups and Leads | Invest in a CRM system to organize leads, track follow-ups, and streamline the leasing process. |
One unconventional route for increasing leads is to rent vacant parking spaces to non-residents via Neighbor.com. These non-residents are not only sources of additional ancillary revenue; these renters are also free leads that can be converted to future tenants. While on-site, a non-resident may be interested in taking a property tour and eventually signing a lease. Ultimately, the more foot traffic on your property, the better. At the very least, one of your parking renters may refer a family or friend needing housing (This is especially likely if you keep your parking facilities in pristine condition. A highly secure and regularly manicured parking lot demonstrates your building’s commitment to cleanliness, safety, and overall renter satisfaction).
Effective Lease-Up Strategies to Reach Stabilization Faster
To shorten the lease-up phase of your multi-family investment or recent renovation, it’s important to use effective strategies to target prospective residents. These strategies can range from marketing to flexible lease terms–each has benefits and drawbacks.
| Description of Lease-Up Strategy | Outcome of Strategy | Effectiveness |
| Aggressive Digital Marketing | Boosts the visibility of your property via social media and SEO | High |
| Leasing Incentives | Attracts renters with move-in discounts, like 50% off security deposit or free parking for six months | Moderate to High |
| Local Networking | Partners with local businesses for referrals | Moderate |
| Flexible Lease Terms | Offers short-term and month-to-month options, attracting a broader resident base. | Moderate |
| Resident Referral Programs | Encourages current tenants to refer others (Cash or gift card bonus, one-time rent reduction, etc.) | Low to Moderate |
| On-Site Events & Open Houses | Will showcase property amenities to prospective tenants who may be interested in touring the facilities | Moderate |
| Enhanced Property Visibility | Improves signage and curb appeal, includes ancillary income opportunities | Moderate |
Aggressive Digital Marketing
One highly effective digital marketing strategy for multifamily property owners is to post high-quality photos and virtual tours of the units. People like to look under the hood (so to speak) and see what they’re getting before they lock themselves into a one-year lease.
Most importantly, engage with potential tenants through posts and comments. Responding to inquiries quickly is an easy way to win prospective tenants over and prove that your staff is attentive and reliable.
Leasing Incentives
Offering incentives (like 1st-month-free discounts) is especially effective in areas with high living costs; in these areas, potential tenants are more likely to be concerned about cumulative living costs (beyond initial rent costs). Of course, offering leasing incentives like one month of free rent, waived fees, free parking, etc., all have cash flow implications. To prevent any backlash from these leasing incentives, always put a timeframe on these incentives to ensure tenants are motivated to sign up.
Here are a few examples of leasing incentives to consider.
| Incentive Type | Description | Duration/Timing | Effectiveness |
| Free Rent | Offer one month or a portion of rent free to new tenants. | Usually, the first month, but it can vary. | High |
| Waived Fees | Waive application or security deposit fees. | Immediately upon lease signing. | Moderate to High |
| Discounted Rent | Offer a reduced rent for the first 6-12 months. | Set period during the initial lease term. | Moderate |
| Free Parking/Storage | Provide free parking or storage for the first few months. | First 3-6 months. | Moderate |
| Move-in Gifts | Offer gift cards, small appliances, or other items. | Upon lease signing. | Low to Moderate |
Local Networking
As effective as digital marketing is, there’s value in having your property management team do things the old-fashioned way. Block out time in their schedule to network with local businesses in the area, as well as realtors. Attending community events and increasing connections in the local area will shine a positive light on the property and encourage others to consider it a potential residence.
Flexible Lease Terms (Month to Month)
Offering short-term leases with an option for month-to-month rent is another good way to shorten apartment leases and attract new tenants. When doing this, consider a range of prices depending on the commitment and the lease’s length.
Renters taking longer leases and committing to larger units with higher prices should be given more flexibility. Consider a trial lease for high-quality tenants who have completed background checks but are unsure of a new property.
Resident Referral Programs
Tenants who refer friends or family should be given a discount or some type of recognition for their contribution to helping shorten your lease-up process–whether that recognition comes in the form of rent discounts, cash bonuses, gift cards, etc.
Just make sure you communicate about the referral program and its success in newsletters and email publications to your tenants. Otherwise, it will quickly fall off the radars of your tenants.
Increase Property Visibility With On-Site Events & Open Houses
Hosting open houses, holiday events, and other social gatherings all increase exposure and reduce vacancies (thus speeding up the lease-up period). Just make sure the events you’re hosting are worth attending.
The more visibility a property has, the easier it is to attract rent-paying tenants–and hosting events is just one way to increase that visibility. You’ll also want to invest in your property’s curb appeal. That way, you can attract passing traffic and any locals. Add ample lighting. Trim the shrubs and powerwash the sidewalk. All of these extra steps can translate to lower vacancy rates.
Final Thoughts
While a property’s location and condition will ultimately determine if a prospective tenant decides to lease, shortening the lease-up period will certainly improve cash flow. While the budget is tight, consider using platforms like Neighbor to rent empty parking spaces that are sitting idle in your newly constructed–or newly renovated–property. (This is a great way to increase ancillary income). An experienced property staff team should be able to take these initial connections for parking or storage rentals and turn them into rent-paying tenants!
