Any landlords give their tenants a coupon or voucher for a small discount $10 lets say, if they pay a certain amounts of months on time?
I was thinking of starting this and giving my tenants a $10 discount "coupon" on the rent if they pay 4 months in a row on time or is this a dumb idea? Least it gives then some incentive to try to pay on time...
Let me know your thoughts.
i dont think that's an incentive. maybe $30 or $40/month. It needs to be sizable, equivalent to another monthly "bill" that they have to pay. otherwise its too small for tenants to actually care about. I have a tenant that pays $35 late fee every month, nearly 8 months in a row and often only a day or two after the date the fee kicks in. Major reason is because $35 isnt a big enough reason for them to cough over 830 bucks two days earlier. A tenant that pays on time will pay on time regardless of a $10 discount. A tenant that cant pay ontime... 10 or 20 bucks is the last of their worries. if going to try and actually entice the slow payers to pay ontime then there needs to be a real monetary amount, in my experience not even $35 is enough.
@Isaac Essex said what I was going to say. But, please give your idea a try and report back.
@joe fairless give his tenants $1 lottery tickets. You might get more bang for the buck that way as well.
Guess its already more or less for the ones who already pay on time.
@joe fairless, How often and how many lottery tickets do you give them?
I don't do this but another landlord in my area charges $100 more for rent than the area average but will offer $100 discount for paying before the due date. It's kind of a reverse way of thinking about it. They do charge additional late fees on top of the $100 if they pay after the due date. I don't know if it works but they use it all of the time.
For example - going rate in the area is $800. They charge $900 a month due on the 1st. If they pay before the 1st of the month, then they pay $800. If they pay on the due date it is $900. If they pay after the date due, then late fees are added to the $900.
Just another way to get people to pay on time. Don't know if it really works....
It's rare for a tenant to have 4 months. I don't think I would give incentive's for early payment. Tenants think just because they pay early for a few months, it ok when there late. It may send the wrong message.
I do have an incentive for late payment, eviction! It starts on the 15th of the month!!
I used to offer a rent rebate if rent was received on or before the 1st (along with a late payment if after the 5th). For those I offered it to, I always got paid before the 1st. And that was the amount I wanted anyway, so if they paid later, I would have been okay with that as well. We then went to a section 8 tenant in the last one we didn't sell at the time, so went to a more standard lease arrangement. Now that I use property management, it would be too problematic. But I will likely go back to it as it was very successful, once I get close enough to manage them again.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing