Since it started preleasing in 2014, Latitude Apartments has offered prospective tenants incentives to stay competitive and fill its rooms.
Visa gift cards ranging in value from $250 to $1,600, Xbox Ones, PlayStation 4s and Fitbits are offered to entice prospective renters.
Adding these bonuses isn’t exclusive to Latitude. Several student-targeted apartment complexes near the University of Nebraska-Lincoln campus follow the same system, contributing to what some feel is an industry expectation and what others say is a way to use quick perks to trap students in bad long-term deals.
Latitude general manager Michael Harris said Latitude offers gift cards to anyone who meets their leasing criteria, which is based on qualifications including rent, income ratio, credit and a background check. The number of students who have taken this offer is undisclosed.
The method was already in effect when Harris took the position in October 2015, and he said he was not surprised by it.
“In my 10 years of experience in property management, every company that I have worked for has used this method or a similar method,” Harris said.
UNL junior Jennifer Kittle took advantage of Latitude’s gift card offer after she was dissatisfied with her experience at Prime Place.
Kittle said when she moved into her room at Prime Place, she found beetles and mealworms waiting for her. When she moved back to a different room this summer, she was met by flies and some torn-off crown molding.
After less than a week of living at the new apartment with little response from Prime Place, Kittle and her roommates took action. They heard of Latitude’s lower rates but were also tempted by the apartment complex’s offer of gift cards that can be used to help displace the fees associated with ending leases at other complexes.
“We approached them because they had done that deal with friends of ours where they’d buy them out,” Kittle said. “We talked to them, and they said that they could possibly do it for us too.”
It cost Kittle $1,500 to end her lease at Prime Place, but the $1,600 Visa gift cards from Latitude softened the blow.
Technically, students are allowed to spend the money however they wish.
“A majority of them typically apply it toward their rent or their move-in fees,” Harris said. “But they always have the option to get the physical gift card, and they can use those for what they want.”
Although Kittle and her roommates had to pay Prime Place rent for August, they started paying rent at Latitude in September after using the gift cards to pay the buyout fee at Prime Place.
Kittle said the incentives offered by Latitude helped her get out of a bad situation she and her roommates might have otherwise been stuck in. For that, she said, she’s thankful.
However, Jeffrey White, attorney at law in UNL’s Student Legal Services, said students should exercise caution when transitioning between apartments. His main concern with gift cards incentivizing buyouts is that students might get caught in two leases at once.
“As long as you get everything in writing and everyone agrees that you’re buying out a lease and not just pre-paying three months’ rent, then it’s okay,” White said. “If people are concerned about that, come and show me the buyout, and we’ll make sure that everything’s exactly what you expect it to be.”
Prime Place property manager Aaron Hunt said it’s no secret Prime Place has had problems that have hurt its reputation, especially when the building opened.
In regards to Kittle’s complaints of bugs at Prime Place, Hunt said the complex responds to these complaints by offering a temporary unit for the tenant to move into before treating the unit, as well as bringing in pest control. He said Prime Place has successfully implemented maintenance records to address problems more quickly in order to work with the tenants to get the issue resolved.
As for other complexes buying out leases, Hunt said when any apartment complex is less than 100 percent full, the staff will do whatever they can to sign more leases. But he said buying people out of leases isn’t common in Lincoln.
“We have heard of other apartment complexes offering to buy students out of their leases,” Hunt said. “However, as far as we know, very few of the situations have actually occurred anywhere in Lincoln this year, including Prime Place.”
Hunt said there’s no formal buyout process between Prime Place and any other apartment complex.
“We don't work directly with other apartments if they are buying out a tenant's lease,” Hunt said. “Tenants pay those fees to us directly, as the tenants are the ones on the lease.”
Other apartments have used methods similar to Latitude’s to entice students to sign leases, including 8 | N Lofts.
“We are doing gift cards for signing within 48 hours of tours,” said Justin Kieckhafer, assistant manager of 8 | N. “It's our 48-hour special. It's how our corporate set the timeline.”
But Kieckhafer said he believes incentives such as these don't make much of a difference, and people either feel comfortable on a tour and like what they see, or they go somewhere else.
“I don't know how much competition plays into it,” he said. “It's more about customer service – how people feel when they tour.”
While some students generally see these offers as a great deal, Jerry Shoecraft, property manager at the 50/50, said the deal could be more harmful than it looks.
“What’s happening right now in the market is all these new operations came in and built too many beds,” Shoecraft said. “So, in order for them to try to increase their occupancy, there are often these outrageous deals. They’re trying to buy people’s leases, give them all these incentives, lowering rents so low that by them doing so, it hurts the entire integrity of the market.”
Shoecraft said the offers are also harmful to students because they have to give up certain conveniences.
“I think they won’t be happy in the end when they realize, ‘OK, I sacrificed location, service, convenience for a gift card or some lower rent,’” he said.
While the practice isn’t illegal, Shoecraft said from a business standpoint, it doesn’t reflect well on the apartments.
Although there haven't been reports of students at the 50/50 leaving and taking this deal, Shoecraft said the 50/50 has not and will not make an offer like this because of what’s important for the market as a whole.
“We’re trying to be a leader in respect to the right way you should market your product so that we add to the strength and integrity of the market and not be a negative to the market,” he said. “So, if this pattern continues, it’s bad news for everyone.”
White said from a marketing perspective, taking incentives won’t always be the best decision for a student.
“[The method] was designed to evoke an emotional response, and if someone’s trying to get you to think emotionally, that means they don’t want you to think rationally,” White said. “That’s really what it comes down to.”
- Jerry Shoecraft
White also said students should be especially careful with electronic deals.
“I see a lot of places where it’s $500 or $600 for one bedroom,” he said. “You can pretty easily get a two-bedroom apartment for that outside of this little ecosystem. It might be tempting to say, ‘Hey, 42-inch TV if we move from our older unit to this newer one,’ but if you’re paying $300 more in rent, you’ve bought that TV in like a month or two months.”
Deals such as these - whether they be gift cards, electronics or reduced rates – are targeted to students and are common in the housing industry in the UNL area, White said.
“It’s not at all common in the world outside of this specific kind of ecosystem,” White said. “If you’re just renting to the general public, I don’t think I’ve seen a promo giveaway. It’s very common within these few companies, but not so much out in the real world.”