Property Management incentives

[Brie Schmidt]

I have a PM who manages my out of state properties and overall is great.  Repairs are taken care of quickly and at a good price.  The communication with me is great and I am happy with that..... but recently we have had some issues with tenants and vacancy.  

Example is a tenant how lost their job in Aug.  They paid $400 of the $650 rent for Aug and my PM asked me if we could do a payment plan of bi-monthly payments for Aug/Sept with the tenant getting back to rent on the first starting in Oct.  We had just started working together so I wanted to give him so ownership of the situation so I said I will follow his recommendation of the payment plan.  Well the $400 Aug payment was all we got until they moved out Oct 1 and we just got it leased for Dec 1 after I insisted on putting an ad online because the newspaper and sign in front was not working.  So it sat another 2 months vacant. I put an ad on CL and got it rented the next day

He and I are having a discussion tonight because we are doubling our units next week and this is not going to work out like this.  He drives around monthly and picks up rent and has been managing most of these tenants for years and has a personal relationship with them, which I love.  But there is a fine line between friend and landlord and that is something he struggles with.  I can handle that discussion but the other part of the problem is our contract is written that he gets a % of rent collected each month and that lease renewals and filling vacancies are part of his fee.  

We had another vacancy for Nov 1 and he just bought a newspaper ad yesterday to rent it out.  I need to incentive him to keep our vacancies low.  I am thinking of doing a quarterly bonus system.  For example in Q1 he should collect $21,300 with no vacancies.  If I bonus him 1/2 a percent if there is no vacancy it would be $1065 and maybe a 1/4 a percent if it is less than 25% vacancies.

Thoughts? Ideas?  Anyone tried something else that worked well?