Investor · Roswell, GA · Member since 2014 · 234 posts · 97 votes
Greetings my BP fellows,
You know how when you are driving you tend to think about different things that can add value to your business. That saying, "Give and you shall receive."
So I'm driving and I ask myself, "How common is it for a RE investor to give incentives to their current tenants if they can recommend someone to occupy your empty unit and lives there for a year?" Well thanks to @Joshua D. and his great team, I can pose such question and hopefully create a fun and educational discussion.
Look forward to hearing everyone's unique feedback,
I'm not yet a landlord but hopefully soon to be and considering that topic myself. I'm trying to select things that don't draw in people who can't pay (like no/low deposit) or things that set up an entitlement mentality or that I might not want to maintain. Rather, I plan to focus on rewarding long term tenants who pay on time with rent discounts for new leases (higher discounts for longer leases ala Mike Butler) and upgrades (really, things I mostly plan to improve anyway). Two books I found helpful on this front - Landlording on Autopilot (Mike Butler) and The Landlord's Survival Guide (Jeffrey Taylor). Good luck!
It is a good question. I own a townhome that literally everyone in that cul de sac is either related or friends except for a couple units. The "community" feel keeps them all there. When my current tenants move out I'm considering exploring this option to encourage a long term tenant. I'm curious to see if others approach this tactic and how.
@Damir Kamber We currently offer a finder's incentive to our current tenants for a recommendation of a tenant that passes our rental criteria, successfully completes the application process AND rents (signs 1 year lease) from us. The reward is given after the new tenant moves in and pays the second month's rent. We have signed a few good tenants through this process. We feel it is a small price to pay for good, solid tenants. The incentive reward is 10% of a months rent.
Check with your state real estate commission. In most cases this would be illegal. In Texas you cannot give "valuable consideration" which is defined as a gift valued at more than $50 or cash or equivalent (rent credit) of any type.