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Gifts & rent free periods for tenants - your thoughts

Discussion in 'Property Management' started by Zoolander, 5th Jan, 2017.

  1. Zoolander

    Zoolander Well-Known Member

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    In the last edition of API magazine there was a feature about rewarding good tenants with gifts or rent-free periods over Christmas.

    While I see the merits of doing this in circumstances where the tenant has gone above and beyond like taking initiative to fix items instead of asking the property manager to repair an appliance or replace a small defect, it seems like a luxury for those who do need the rental income to stay afloat, or tenants who, as crass as this sounds, are ordinary (they keep the place tidy, don't complain about issues too much, and pay rent on time).

    I try to increase the rent slightly ($5-10) on each lease cycle if the market allows, and granting a weeks free rent for example would undo the point of rent increases.

    I see rental properties as a largely business transactions - the tenant has a place to call home in exchange for rent.

    If you have an exceptional tenant, how do you thank them?
    Do you send gifts or seasons grettings to tenants generally?
    Curious to know what other landlords do.
     
  2. wylie

    wylie Moderator Staff Member

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    We do nothing, but we are excellent landlords and we actually do have a relationship with our tenants because we self manage.
     
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  3. EN710

    EN710 Well-Known Member Premium Member

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    Never had exceptional tenant! But if I do I might send them flower or the likes during holiday season (through PM).

    I sent one of the PM win in giftbox last Xmas, because she was great for the last 2 years. Property Manager job is hard, so a token of appreciation is nice I think
     
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  4. Hedgy

    Hedgy Well-Known Member

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    My tenants tell me I'm a good landlord so wondering whether the tenants would care to give me an xmas gift in the form of say perhaps a 20% increase on one week's rent:)
     
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  5. MyPropertyPro

    MyPropertyPro SE Qld Property Management & Investor Services Business Member

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    Given the number of properties, for me personally it's not viable for me to send them all gifts. Rightly or wrongly, I pick and choose. I will do it for tenants who actively make my or my PM's life easier or are deserved for other reasons.

    For example, I have a tenant who is quite the handyman and will (almost enjoyably) take care of handyman items for me and just pass on materials at cost. I also have a tenant who had a bit of trouble with the onsite managers and building car park and was quite ticked off with the whole affair (not with me). Even though it was sorted for her, she's a great tenant and a gift goes a long way in keeping her as I feel it's warranted given her experience as my customer. Another tenant of mine is exceptional and is a single mother with three children, long term tenant and keeps the place immaculate and is very reasonable with what she notifies us about maintenance wise (I actually have to encourage her to report more). For tenants like these, and for different reasons, I send them gift vouchers at Christmas and a thank you card.

    For some other tenants who constantly make life difficult for my PMs and for myself, I don't. Some pay the rent on time, some don't but those that seem to want a combative relationship, rather than a harmonious one, aren't deserved of a 'thank you'.

    In the end, we are all human and want to treat people as you are treated. A landlord/tenant/PM relationship is no different.

    - Andrew
     
    Last edited: 7th Jan, 2017
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  6. Chrispy

    Chrispy Well-Known Member Premium Member

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    One of my properties has just been flooded. Single Mum is the tenant, she has 2 small boys. She has been amazing through the entire process, handling the Insurance inspection, putting up with the carpet being removed, heaters on slab floors to dry out. I have told PM to give her 2 weeks free rent.

    She is the best tenant I have ever had. She came without references as marriage had broken up and the house had been sold. She treats the house as hers, even to buying furniture that fits the house! Rent always paid early.
     
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  7. dabbler

    dabbler Well-Known Member

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    I will do it when banks start doing it for me for paying on time etc.

    Hard enough keep up with the children in the family.
     
  8. dabbler

    dabbler Well-Known Member

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    I think you would almost have to do that in this type of case anyway & if they have been a good tenant, you do not want them to walk over something like this & besides, it is not a re occurring regular thing.
     
  9. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

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    I think a rent free period is a bit over the top - as mentioned above, the bank doesn't reward landlords for good account conduct. We're simply expected to meet the liability - just as a tenant is expected to pay their rent on time.

    Wouldn't have any issues providing some chocolates, wine or a gift certificate if it was a property I was self managing - but if it's being professionally managed I don't want to have any contact with the tenants.

    Cheers

    Jamie
     
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  10. D.T.

    D.T. Adelaide Property Manager Business Member

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    Treat them properly year round - they're much more likely to appreciate that and stay long term which benefits everyone involved.

    Paying rent on time and keeping place clean is baseline, not exceptional.
     
  11. WattleIdo

    WattleIdo renovating Premium Member

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    I screen them carefully and find they're mostly great. I keep up my side of the deal by staying out of their lives except when they need things fixing and when PM does regular inspections. I also seriously consider requests like air con and other conveniences, within reason.
    I went to look at a house to rent yesterday and the landlord was there 'fixing things' and telling me about how the last tenant never let him come onto the property to do things to the house. He then told me he wanted to build a deck and spray paint the fence. He raved about how the previous tenant didn't feed the lawn. Alarm bells! Not only will I steer clear of that landlord, but also the property manager.
     
  12. Lil Skater

    Lil Skater Well-Known Member Business Member

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    I recently took over a property and the first lot of rent was due just before Christmas, tenants paid to me - old agent took direct debit. This left the tenant account in the red, unable to buy food etc.

    Owner refunded the rent paid out to her back to me, I refunded my management fee and we forwarded this to the tenant. Fortunately after about 5 days they got their money back, and repaid the rent again.

    Tenant was very happy, they are great tenants, but it didn't really cost the owner anything as the money was back within the week. If I was in the same circumstance as the tenant I would see this as a gift.

    Generally speaking I don't recommend rent free periods or presents unless there's been a particular reason, just doing what you're meant to do under a tenancy agreement is not a reason.
     
  13. andrew_t

    andrew_t Well-Known Member

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    I have just had a lease renewal come up and the tenants asked for rent to be reduced based on recent rentals in the area however they would like to stay on. I said we would like to keep the rent the same and will just readvertise and they have agreed to sign a new lease. I will send couple of bottles of wine as token of appreciation
     
  14. Emble

    Emble Member

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    I didn't realise tenant trust accounts were used for food? As far as I can tell, nobody touches those accounts except for the property management service for whatever they use it for.

    I am a tenant, and I think rent free periods are a bad idea. Here is why: you are varying the agreement to suit a short incidence or emergency and it can be difficult to return to the original expectation. People pay rent and are happy living there or they will notify and vacate. I love living here, but I also pay and handle quite a lot here now (despite property management), and usually to keep costs down for the landlord who let's me stay and gives me flexibility. The property management rarely intrudes either :D but if we need to vary things or fix things officially, they go through the land lord and presumably handle stuff legally.

    Keep it professional and clear always. And always do what the tenancy agreement says unless everybody has been consulted to make a change.
     
  15. Lil Skater

    Lil Skater Well-Known Member Business Member

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    I meant the tenants personal bank account. The tenant paid their rent to me, then the old agent debited their account again for rent that they weren't meant to take. Which meant the tenant had no money in their personal bank account to buy food with :)
     
  16. Ross Forrester

    Ross Forrester Well-Known Member Business Member

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    Rather than make gifts to tenants I prefer to increase the spend on the property.

    In my experience a gift can create a negative experience rather than a positive one. And if you increase the repairs spend you get a better property.
     
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  17. Emble

    Emble Member

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    I am happy to delay a rent agreement start by a few days when half their things are at the residence but they are not able to physically move in. Usually only if payment is secured already haha.

    I definitely wouldn't want to deal with a cycle of mispayments that escalate by encouraging a refund per se for something that is a responsibility of that person even if they are a tenant. My personal account I might donate from I guess if I felt bad, but at the same time the detrimental reliance is on PM and landlord in this relationship you have described.

    It is one thing to say it might be late, but the rental account is not really for her upkeep or for her to have any transactional power over. It makes PMs/LL trust account/financial relationship messy and that breeds a lot of room for dispute material from the outset. Rent just needs to be set down as something that is necessary for a tenant to have their right to premises.

    There is no way to get it off them really ever again, especially if they are spending it and not following it up to ensure they can eat food next week.
     
  18. Emble

    Emble Member

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    What is a repairs spend? Spending on the property is way better.
     
  19. Ross Forrester

    Ross Forrester Well-Known Member Business Member

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    Sorry - I meant by repairs spend to indicate an expenditure for a repair on the property. So maybe a touch up of the garden or the reticulation.
     
  20. Emble

    Emble Member

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    I thought repair spends were the emergency repair call out spends.

    We have had an oven replaced for nearly 2000 because the part that needed replacing was 700 less. Thats after 2 years here and certainly not a very old oven but a contractor recommended it - and the oven was a property feature. Had the tradies not been in and out and difficult to schedule, it might have been good. Instead it leaked gas for 4 days and required more activity for me to make sure it was fixed.

    In cases like that, it makes you wish that you had never asked for the property management to check on something that maybe required repairing :D

    Rent should never be free or gifted but repair fund allocation for improvement of things would be good for any tenant. I can see why a "less rent" gift would seem good after that, but that a property management issue.
     
    Last edited: 9th Jan, 2017