I need ideas for a tenant point system!!!

18 Replies

So one of the big things We want to do as a Land Lord is building relationships with our tenants through great customer experience. The goal of this is to build a brand for us in our community and cut down on vacancy. 

One of the ways we want to provide this experience is through a point-based reward system for tenants.

For example, every time tenants pay the rent on time they get a point. At the end of the year, they can turn in their points for some pretty cool stuff, from a gift card at Target all the way to a new TV. 

I'm throwing this up here to get good ideas for what activities people can do to earn points. All the activities should be things that take care of the property and cut down on PM costs in order to make it worth it and train the people to be great tenants.

So what do you guys think are great, point-earning activities?

This sounds like a good idea on the surface but it can be problematic, particularly  if you scale to a lot of rentals. It takes a lot of time to track the points, purchase the rewards, announce the winners, issue the rewards, etc. I have had the same thought but the truth is, do you earn points and rewards when you pay your gas bill or mortgage or taxes? People don't need to be rewarded for doing what they agreed to do. It's like a participation trophy or expecting a pat on the back for not going to jail.

If you decide to go forward, I would keep it pretty simple. Pay rent early six months in a row and be entered into a drawing to win something. The value of the prize would depend on the number of units you manage, average rent, and how generous you're feeling. Truth be told, I don't think it would be enough motivation to turn a bad tenant good.

Thank you for your thoughts on this. It makes sense that it would get really complicated and challenging as we scale. I like your idea of entering a drawing, it would be simple and easy to manage. In your experience is there anything else besides this prize idea that would help incentivize people to be good tenants but also help set us apart as a rental home company? 

If you have to reward/award your tenants for being "good," you've got the wrong tenants.  And, if you're the "good" landlord, your tenants will know that what they thought they leased is what they got and when they have a repair issue, it is corrected in short order - and that's the best "prize" you can give.

@Sawyer Smith

At a seminar I attended a year or two ago they had this for property manager evaluations and the tenants graded them. And the managers could earn rewards as a Christmas like bonus. Something to think about

@Sawyer Smith , people who pay you only want money back.  That'll be your issue.  Easy example, I hated when companies I worked for gave me a 'big gift' because I would have preferred cash.  Everybody does.

I do like the option of some type of reward program though.  I typically offer financial rewards for referring tenants.  Discount if they pay rent in advance.  Renew for a 2-year lease.  I'll also give the occasional gift card as a token of appreciation whether it's because they've been great, dealt with a headache or renewed their lease.

I wouldn't want a public system in place because that locks you in.  What if something happens that changes your mind?  Your tenants also learn that they'll be rewarded for certain actions, then expect more and more.

Occasionally we do something simple- we have a monthly newsletter that we send out, and we might have a drawing for a $50 gift card and we'll put anyone in the drawing who pays rent on time the following month, something like that. I don't want the trouble of tracking and data entry for a point system, so we just make it an occasional one-off drawing. 

Use a carrot and a stick:  offer a small discount for EARLY payment (before the first) and your regular penalty for late payment.  See who pays early.  Maybe send them a pizza coupon.

@Sawyer Smith I've actually been thinking about this same topic recently, with an emphasis specifically on something you mentioned - "cut down on vacancy."  Assuming your tenants already pay on time, what's the best way to incentivize renewal?  One idea I am thinking about is offering a small discount on the first month of rent each time a tenant renews, possibly with a larger discount for a multi-year renewal.  There are a couple of great BP threads on this same topic - here's one from a couple years ago that was particularly interesting:

https://www.biggerpockets.com/forums/52/topics/422047-do-you-reward-your-residents-at-their-lease-anniversary-if-so-ho

Good tenants don't want to be bothered, or feel like they are being monitored. Personally, I don't think a point system is a good tactic. Stick to a strict screening and you wont have any major problems.

Why give away hard earned money when you don't have to?

I think this is an interesting idea. And yes, many vendors “reward” you for paying on time.  For example in Oregon we get a 3% discount if we pay our property taxes in full instead of doing it in installments. Other vendors give discounts for paying in full or using cash, etc. 

Credit cards give “points” all the time 

as for tracking - a simple excel sheet would suffice.

Good for you for thinking Creatively!

@Sawyer Smith

I simply don’t like anything like this. I also don’t believe in gift cards at Xmas or bdays, or any prizes. I simply believe in providing a great place to live and being a very responsive landlord to any issues.

I know some think differently, but when I was renting, if my landlord was giving gifts I would think to myself; dude, just lower my rent. That’s a great gift.

@Sawyer Smith

As a follow up, you asked what you could do to set yourself apart from other property managers/owners. In my experience, when I get new tenants, their big reasons on why they are moving is; the owner or PM simply didn’t respond quickly to maintenance issues. That, and gaining a reputation as nickel and diming people on their damage deposit can be a killer for reputation.

So I make sure I fix what needs fixing ASAP, and we don’t keep damage deposits unless it’s true damage. A few nail holes? Some painting? An hour of wipe down cleaning? Just a cost of doing business.

The two main things I want my tenants to do are: 1) pay rent on time, and 2) take care of the property.  However, I wouldn't want to try to come up with a point system to incentivize these things for a couple reasons. 

First, paying rent on time is a basic expectation outlined in the lease that I don't feel needs any incentivization or monetary payment on my part.  Plus, there kind of already is a built-in incentivization to pay rent on time with the late fee.  If they pay rent on time, they don't have to pay the late fee.

Second, taking care of the property is completely subjective.  I have high standards and what constitutes taking care of the property to me may be totally different to a tenant.  They may think as long as they don't burn the house down they're taking care of it.  However, the bigger issue - in my opinion - is that I actually think it might encourage someone to NOT report legitimate maintenance issues with the home for fear that they might lose points and not get their reward/prize at the end of the year.  Then, what could have been a simple kitchen sink leak initially (for example), goes unfixed and turns into a whole kitchen floor replacement because it was never fixed and continued to leak.  Not the kind of behavior I'm trying to incentivize.

@kyle J. What would you think about trying to incentivize people for the stuff that was beyond the expected a written in a lease. So like maybe not stuff like paying on time and mowing the lawn, but trimming back the bushes, pulling weeds out of the driveway, cleaning our the gutters? After reading the feedback on this post I'm more thinking about how to incentivize people to do things for the properties that go beyond what is the basic expectation of a good tenant and push them to be incredible tenants that end up saving me money on basic maintenance costs. 

Originally posted by @Sawyer Smith :

 In your experience is there anything else besides this prize idea that would help incentivize people to be good tenants but also help set us apart as a rental home company? 

1. You aren't going to incentivize people to be good tenants. They either are or they aren't. Screening helps you identify the good ones.

2. If you want to set yourself apart, provide quality rentals, maintain them well, and respond to repair requests as quickly as possible. It doesn't take long to get a reputation. Make sure it's a good one. 

One idea I heard was to do a x star program where x is the amount of years you are targeting your tenants for. You put in place (if legal) an automatic renewal and at month six you offer a free “improvement of their choice” in the house at the end of the lease (select from a list you provide for things you know are getting old). Then at the year you give the improvement and they stay. After x many years of being in your place you can offer giving them $100 back of their security deposit. Call it your VIP program or something like that. That’s what I plan to do!

build relationships.. huh? Look I just want them to pay me and not destroy the place . Your not supposed to be building castles in the sand with these folks lol . They are your employees not your customers . You got it all backwards bro ! Why reward basic behavior that is legally expected and required of them that they agreed to ??? Makes no sense to me

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