Gifts/Incentives for good tenants? Anyone do this?

Discussion in 'Property Management' started by Hawks, 6th Jul, 2021.

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  1. Hawks

    Hawks Member

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    I'm curious to see if anyone does this. We now have 2 IP's, both rented, and are looking for more IPs to add to the portfolio. We have been thinking of having a very annual incentive/reward scheme for tenants if they pay on time for the whole year.

    IP1 - Have owned property since 2013 and have had the same tenants in it since 2018 now. Really good tenants, always pay on time, never request maintenance (they actually fix small things themselves which is a topic for another time). We've been thinking of either sending an EOFY or Xmas gift to these guys for being legends.

    IP2 - Due to settle in the next week or so, currently tenanted, and as of today since receiving ledgers etc, can see they are also good tenants who pay on time (at least historically). Once all the property settles and the new PM's take over, we've been thinking of sending a very informal letter, outlining an incentive/reward for on time payments, and to let them know they're free to reach out to the PM or ourselves if they need anything, and to thank them in advance for looking after the property.

    Does anyone do this? Does it grease the wheels and keep tenants motivated to pay on time?
     
  2. standtall

    standtall Well-Known Member

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    I appreciate the sentiment but paying on time is expected from all tenants. I know property managers who would rule out future tenants if they had any arrears in the past 1-2 years just like a bank wouldn't easily lend you money if you missed payments.
     
    Last edited: 6th Jul, 2021
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  3. Hawks

    Hawks Member

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    I expect it too, but it never hurts to reward good behaviour or show appreciation?
     
  4. Pumpkin

    Pumpkin Well-Known Member

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    It is very nice to see a Landlord like you appreciating good Tenants. You wont believe the number of Owners we come across who still has the land "LORD" mentality.

    For existing Tenants, my personal experience is you need to know the Tenants as to what they like and dislike. If they have kids, something for the kids would work well. If you dont want to go overboard, movie voucher is always good although a bit tricky with Covid. And a Christmas card cum ThankYou card is always good.

    As for the New Tenants, I wont send anything to encourage prompt payment. But I might give a small gift to thank them for putting-up with you during the Buy/Sell/Inspection/Settlement period. Something small like a potted plant or similar. For Brisbane, maybe an Oil Heater because it has been very cold lately LOL.
     
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  5. thydzik

    thydzik Well-Known Member

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    I normally go easy on the inspections or rent increases if tenants are easy to deal with and no issues.
     
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  6. MB18

    MB18 Well-Known Member

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    I've had a landlord provide gifts to me (the tenant) before. It was a nice gesture for sure, although he was a great landlord anyway which in a strange way meant a gift certainly wasnt necessary.

    I've never heard of incentives for on time payment in the rental market, but its certainly common across various utilites and goverment fees/levies I've come across so why not.
     
  7. Dan Wood

    Dan Wood Well-Known Member

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    A what?!
     
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  8. Cynthia Chow

    Cynthia Chow Member

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    We are very lucky to have very good tenants too! We haven't been increasing the rents because they pay on time. I also drop them xmas hamper as I know they have kids. But I haven't been giving them any money incentive.
     
  9. Hawks

    Hawks Member

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    Haha it sure is freezing!

    I dislike that mentality you mentioned - we need them as much as they need our property. Although these days, from what i've read of other people's experiences, it's the tenants who seem to have the bad attitude. I'm very appreciative mine are not like them, and if a small gift keeps that going, I win!
     
  10. Sackie

    Sackie Well-Known Member

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    For about 10 years now, I have been giving all my "good tenants" gifts twice a year. Once mid year and at Xmas time. Ranging from small gift vouchers, wine, choclates and flowers.

    Human beings have wide ranging discretion with how they treat other people, and tenants are no exception. I can tell you for a certain fact that the relatively small cost of this over the years has yielded back benefits many times fold. And imho is just good business sense.

    I dont stop with tenants. I do similar for agents, builders, consultants etc. Its a small business cost and you would be amazed with how much good will it buys you with folks.

    A recent example. I needed a job done urgently in Brisbane and its almost impossible to get it done the next day or even the next week. I called a builder who I have a relationship with and he said "dont worry i'll get it done for you by COB tomorrow mate". Didn't even charge me.
     
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  11. Hawks

    Hawks Member

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    This is exactly the sort of thing in the back of my mind. I'm a BDM as my day job and even the smallest token of appreciation, both up and down the supply chain, can come back 1000x fold when you need it most. Plus, when all other decisions around IP's are emotionless, I think this puts a little warmth & humanity back in the process.
     
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  12. Trainee

    Trainee Well-Known Member

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    Then do it, enjoy the feeling you are doing good but without expectations of return.
     
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  13. D.T.

    D.T. Specialist Property Manager Business Member

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    Doesnt happen very often, but we've had a couple of our owners have us organise things like a rental credit, bottle of wine, gift basket etc when tenants have been great.
     
  14. Travelbug

    Travelbug Well-Known Member

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    We send gift cards at Christmas saying thank you for being a great tenant. Amount depends on the tenant. There is no "deal".

    I would not send a letter saying, if you pay on time I'll give you a gift.
    Paying your rent on time should be expected. What if they pay on time but are a pain with repairs etc? Do you still send the gift?

    Give a gift when they move in if you like, this will set the tone for the type of landlord you will be.

    During Covid we had no tenants default or ask for a discount even though I know one person wasn't working for a while and one actually got Covid. I'm guessing it was because of the personal attachment.
     
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  15. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    One of the best things you can do is look after their rent or other conditions. They will feel appreciated. I had a fantastic tenant who looked aftre our former home. We knew the yard was a lot to manage on her own and so threw in mowing that we paid. (Agent said it was looking a bit neglected) So we turned a negative into a positive for both of us. I would think having the agent suggest repairs is like winning lotto for some. Some fear asking and if there is a defect - just fix it.

    Being a arse one day and sending a cheap bottle of plonk the next doenst make sense. Messages are all in the envelope and its delivery.
     
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  16. boganfromlogan

    boganfromlogan Well-Known Member

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    Love my tenants.

    It is tricky to know what to do until a time period passes.

    One of our best tenants responds very well when we tell them we value them. So we do tell them. They got a new kitchen ( we had planned it but very much timed the build to their request ).

    Another couple struggle over Xmas to work (casuals ). U know that awkward week where everyone is on holidays. Xmas to new year. So each year they needed extra time to pay ( granted of course). This year one weeks rent free - that awkward week. They got a higher spec cooker this year also.

    Those described were impacted negatively by COVID and we did offer rent relief ( really just rent holiday ). They declined ( pride?) Prioritised rent all the way thru

    Bless 'em.

    Family also our tenants. THEY GET NOTHING. Hee hee.

    So horses for courses.
     
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  17. jaydee

    jaydee Well-Known Member

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    I don't believe in providing gifts for tenants, although I can reward in other ways by attending to items promptly and making their tenancy as comfortable as possible (providing they also do the right thing).

    The same argument could be: Does your tenant provide you with a gift for providing them with affordable housing? I doubt any LL would expect this.
     
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  18. Hayley Cannon

    Hayley Cannon Well-Known Member

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    I have a few clients who give gifts/free rent periods at Xmas or EOFY.

    I would be careful on putting this in writing or even advising the tenants of your intentions if this is in NSW. In the landlord information statement it states:

    As part of any agreement you must not:
    provide that if the tenant does not breach the
    agreement, the rent may be reduced or that the
    tenant may be given another benefit


    Your best bet would be to just provide a gift etc when you feel like it as a good will gesture if you want to.
     
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  19. Paul@PAS

    Paul@PAS Tax, Accounting + SMSF + All things Property Tax Business Plus Member

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    This discussion is like employees who think they deserve a massive pay rise for ...doing their job.
    When did Westpac decide to give $50 to you as a thank you for paying your loan over the past year...as you agreed ?

    I suspect too many people were not hugged as children.

    I am often asked by clients if they can claim a deduction for such gifts. The answer is no. It wasnt incurred as a legal obligation in producing income. Its like teachers cant deduct buying kids lunches or classroom eg Xmas or Birthday gifts. Its unrelated to production of income and isnt required. ATO often deny work deductions for work expenses that arent required to be incurred.
     
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  20. Sackie

    Sackie Well-Known Member

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    We don't owe our tenants gifts but when they are occupying millions of dollars of assets, making them feel valued with some small gestures makes sense and cents to me.

    I'm talking about good tenants. Bad tenants just get the boot come lease renewal.
     
    Last edited: 6th Jul, 2021