Tenant Incentive System

3 Replies

I'm currently starting my REI journey; I'm about three months since finding my interest for SFH rental properties. My goal is to have my first property by next fall. I am developing systems for my local market. I've been thinking about trying to develop a system in which I can offer an incentive for my clients, rather than always focusing on the negative punishments (fines, fees, eviction, etc.). Don't get me wrong, I believe those are important guidelines to establish. Yet, I'm starting to think that if I could reward good behavior from my tenant rather than focusing on finding something to punish, then we could have a much more positive experience. Some brief examples of what I've been brainstorming includes:

  • Thorough documentation of the property before the tenants move in and before their lease ends. Compare both the images/video and if the property is equal or better condition then the last months rent will be dumped.
  • Take off X amount of dollars in rent per month for no neighbor noise complaints.
  • Agree to not raise the rent prices if the tenant agrees to upkeep property to your standards.
  • Give a stipend for all repairs done by the tenant with your approved contractors.

These are just a few of the ideas that have been bouncing around in my head. I would love to hear others thoughts, ideas or experiences in regards to this topic. Cheers!

Originally posted by @Dane Larsen :

I'm currently starting my REI journey; I'm about three months since finding my interest for SFH rental properties. My goal is to have my first property by next fall. I am developing systems for my local market. I've been thinking about trying to develop a system in which I can offer an incentive for my clients, rather than always focusing on the negative punishments (fines, fees, eviction, etc.). Don't get me wrong, I believe those are important guidelines to establish. Yet, I'm starting to think that if I could reward good behavior from my tenant rather than focusing on finding something to punish, then we could have a much more positive experience. Some brief examples of what I've been brainstorming includes:

  • Thorough documentation of the property before the tenants move in and before their lease ends. Compare both the images/video and if the property is equal or better condition then the last months rent will be dumped.
  • Take off X amount of dollars in rent per month for no neighbor noise complaints.
  • Agree to not raise the rent prices if the tenant agrees to upkeep property to your standards.
  • Give a stipend for all repairs done by the tenant with your approved contractors.

These are just a few of the ideas that have been bouncing around in my head. I would love to hear others thoughts, ideas or experiences in regards to this topic. Cheers!

 Don't try to reinvent the wheel man. All that stuff is mumbo jumbo. Set rules & then enforce them. Fix things that need fixed. Evict people who don't pay. End of story.

I would never agree in writing to not raise the rent. The term of the lease determines when you may raise the rent-- anything else (in writing) is just something you might end up litigating later; a lawyer wrote the lease-- don't mess it up. 

Not disturbing your neighbors is expected of all tenants. You'll end up being putting yourself in the middle of a squabble the first time a passive-agressive tenant gets mad at their neighbor and complains about noise to screw him out of the discount. 

Never, ever let tenants pay your contractors. Bill tenants for repairs due to their negligence but You pay YOUR contractor. That contractor should always report to you. 

We will, once in a while make our handyman available to fix little nuisance problems like small holes in walls or broken cabinet pulls, high light bulbs, etc, if he is on site and has a light day, it generates good-will and gives us a chance to get in the units and check on things on short notice.

We can't afford to return the deposit AND THEN forgive a month's rent when a tenant does what is legally required of them. However, we will in some situations do an on-the-spot deposit return when a place is left pristine rather than making the tenant wait the 30 days the law allows us.

We have found that what tenants really appreciate is being treated RESPECTFULLY and receiving good VALUE and service for their hard earned money.

@Dane Larsen ,  Tenants often do want to improve their living space.  That is something I encourage.  I've especially, enjoyed instances in which tenants enjoy the type of work, maintenance, and improvements that would be simply chores to me.  One tenant enjoys painting, another wants to trim our apple trees.  One tenant looked forward to pressure washing our detached metal garage, and several express joy in chopping firewood salvaged from trees blown down in a storm.   All these endeavor's I've encouraged.   The incentive I offer is to pay for the materials (and required tools) if they want to do a project that we both agree improves the property.   Though money can be an incentive, it is typically not necessary to encourage tenant efforts.  I recommend that you keep all the rent you can get and let your tenants keep the satisfaction of doing constructive work on a project that they conceive and enjoy.