Hi all, I have several SFRs in the Atlanta area and have been fortunate to maintain 100% paid occupancy during the pandemic. Recently, one tenant signed up for RentalKharma, which gives them an improved credit score if I confirm they pay rent on time. This got me wondering if some type of similar incentive program could be effective in improving how tenants treat my properties. For example, I find that most tenants do NOT change HVAC filters as required in the lease which no doubt leads to more expensive HVAC repairs. Some don't maintain their lawns resulting in HOA notices that I have to run down. Others put crap down the drains or disposals that lead to plumbing issues. Etc. So my thought was, what if I offered some incentives for proper maintenance? So if they can show me they are changing air filters etc. they earn some kind of reward. Also, I have the right to inspect the properties but scheduling that is a hassle and I rarely do. Recently, I refinanced and got current pics with the appraisals. I was able to see general conditions and note some specific issues, like a broken light, evidence of a dog, etc. So it occurred to me that I could also ask tenants to upload pics every quarter in exchange for some ongoing benefit like a free Netflix or Hulu account. For me, it would be worth a few bucks a month to have eyes on the property. What do you guys think about these ideas? Does anyone here offer any kind of incentives for tenants to take better care of your property? Or provide regular pics in lieu of walkthroughs or inspections? Please share your thoughts....

Incentives for tenants to better maintain property?

Rental Property Investor · Brandon, SD · Member since 2015 · 1k+ posts · 1k+ votes

5y

Hi Alec,

First off, make sure you are budgeting for the additional repairs you have to do with tenants. For me, it's 5% of the rent plus another 2-5% for big things (capital expenditures). You might want to consider getting a property manager to help you. Getting into those properties is hard but only because you are like me and your time is better spent elsewhere. It's best to pay for someone to do that for you. I think getting pics is a good idea, but it seems like it wouldn't take too much to show you only the best parts of the property. And then you are taking a bunch of time replying to them to tell them to take a snap of the furnace from a different angle or whatever.

Tenant screening could also help you. Another thing I hate doing, and pay for someone else to do, is calling references. If they didn't take care of the previous property, they won't for you. I suggest taking that neflix money and getting someone to help you.

3 Reply

Alec P.

OP

Member since 2020 · 5 posts · 12 votes

5y

Hi Benjamin,

Thank you for your input!

One follow-up q. I have for you -- Do you think all the repairs you do were inevitable, or could some have been avoided if the tenants treated the place better?

In my case, I have several properties in the same neighborhood, built at the same time, etc. But some tenants never have an issue and the place stays in perfect shape, others constantly want things fixed. Of course I do all the proper screening, but it can't really tell you much about which type they will be. So I'm wondering if I can influence the tenants to treat the place better once they are there with some incentives. What do you think?

1 Reply

Andrew S.

Rental Property Investor · Helena, MT · Member since 2017 · 282 posts · 117 votes

5y

I think if you provide a presence showing hat you care about the property condition, they will treat it better. If you rarely inspect the properties, I think it's a fair assumption that you don't care much about the condition (from the eye of the tenant).

5 Reply

Alec P.

OP

Member since 2020 · 5 posts · 12 votes

5y

Good point. How often do you recommend inspecting the properties?

1 Reply

Andrew S.

Rental Property Investor · Helena, MT · Member since 2017 · 282 posts · 117 votes

5y

I self manage so I'm around my apartment complex doing minor maint, vacuum the lobby, cut the grass a few times during the summer. I try to be there doing "something" about once a month or so.

I understand the lack of appeal in this work, but it allows me time to catch up with the tenants. I probably get half a dozen or less minor maintenance requests in passing over a year. Add silicone to this, put down some ant traps, minor stuff. My intention, I hope, is that it shows the tenants that I care about the property.

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Tracy StreichPro Member

Real Estate Broker · Tulsa- OKC Oklahoma · Member since 2017 · 868 posts · 801 votes

5y

@Alec P. We do a 2x per year preventative maintenance inspection. this includes a filter change, checking for water leaks, inspecting the hot water tank and checking smoke and CO detectors. These are the big ticket items. It also allows us to see the overall condition of the house and see if we want to renew the lease.

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Steve Mandelbaum

Developer · Jacksonville Florida · Member since 2015 · 57 posts · 39 votes

5y

It is an ongoing battle. The problem is tenants don't see it as their own property and it isn't. No one cares for your stuff the way you do. Which results in all the problems you listed above.

The decision is if it is worth the time and effort to check each property on a regular schedule and enforce the rules or is my time and money better spent on other activities? I have 12 properties, if I visit 4 a month that is once a quarter. To visit 4 a month is probably half to full day's time per month. Scheduling, time in unit, travel, follow up, etc.

Sadly, I have taken to a reactionary approach and try to recover some of the damage from the deposit. The A/C filter is the biggest issue. I remind them constantly to change the filter.

Giving them a gift would be effective in the beginning, then it would lose its effectiveness.

1 Reply

Greg WeikBusiness Member

Property Manager · Denver, CO · Member since 2020 · 263 posts · 327 votes

5y

@Steve Mandelbaum, your concerns and approach are valid and intelligent, IMO.

There is a service whereby AC filters can be delivered directly to your home monthly, every 2 months, etc. and you could elect to eat this charge in exchange for the tenant texting you proof that the filter has been changed out in your HVAC system. Alternatively, you could just put this cost and requirement in the lease.

As to interior inspections, the results there are going to be mixed. Property managers who get tenant placement fees during turnover usually have no trouble conducting multiple interior inspections during the lease. This is obviously because the inspection itself LEADS to higher turnover. Good tenants don't want to be babysat, and they definitely won't feel like it's their home.

Preventative maintenance is smart, but in my experience as an investor and property manager, the AC filters are really the only routine maintenance item you need "eyes on" for more than annually. It's possible there is a slow leak under the kitchen sink or something that has gone unnoticed, but I don't think it's worth your time and the tradeoff to be in your rentals more than annually.

Ultimately, tenants are who they are. Some are going to be incredibly clean and will leave the place spotless, and some are going to be dirtbags. This will be true regardless of the number of interior inspections you do. Tenant selection is really the key to everything.

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Dena Puliatti

Property Manager · Huntsville, AL · Member since 2017 · 302 posts · 246 votes

5y

I've found quarterly inspections to be very helpful. A member of my team schedules them (tenants do not need to be home, but they do need 48 hours notice in Alabama). He changes the air filters, checks the smoke detectors, looks under all the sinks for leaks, and makes general notes on the condition. If a home is particularly untidy, I get to make a fun phone call, but it keeps me abreast of the condition and lets the tenants know that we are interested in maintaining the home.

I like the idea of an incentive for landlords that choose to self-manage. It's always a good idea to keep good tenant relations.

3 Reply

Josue Vargas

Real Estate Agent · San Antonio, TX · Member since 2017 · 814 posts · 466 votes

5y

@Alec P.

I don't do any kind of rewards. I rather pay someone to inspect the property for me instead of giving something in return to the tenant for simply follow their lease.

My "reward" is a good reference if they comply with the Lease. Freebies can add up and tenant will expect something in return every time they send you pics of the good areas they keep within the property.

1 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

5y

reality is the filters cost money tenants dont like to spend their money on your property.. I would never expect a tenant to change filters.. just do it yourself.. about the most i see tenants doing is a half arse job mowing the lawn..

you get some that are particular but not many. this is why I love my las Vegas stuff Desert landscaping tile roofs stucco construction semi Bullitt proof.. plus A class tenants that are a dream.. of course on paper returns are lower but I think in the long run IRR will be higher than those with tenants that are tougher on the properties etc.

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4 Reply

Lam N.

Rental Property Investor · Troy · Member since 2017 · 175 posts · 271 votes

5y

I solved this problem a couple years ago. And the solution to this problem is simple. When I choose tenants, I lean toward people who will see the rental as their home instead of just a temporary place. This meant I give them the freedom to paint the walls whatever they like. Give them certain freedom that most other landlords don't give. This way, I've had tenants spend their own money to have a central AC installed. I've had tenants who spent their own money to put in a fence. Etc.

As long as they view it as their home, they will take very good care of the place.

I recently got a tenant spending their own money to finish the basement. I know, liabilities, right? Let's just say I sometimes go a little outside the box. They are happy there and have no intention of moving anywhere. As long as their upgrades are within reason and I approve it, why not?

Most of my tenants have a flower garden of some kind.

3 Reply

Joe SplitrockPro Member

Moderator

Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes

5y

@Alec P. tenant is supposed to take care of the property, just like they are supposed to pay rent. If they are going to violate rules or not do basic maintenance, they need notice of lease violation. The stick is far more effective than the carrot. At the end of the day, you need to be doing inspections and enforcing your lease. Giving them free things will not change their behavior and it will just cost you money.

3 Reply

Tom T.

Investor · Cumming, GA · Member since 2015 · 79 posts · 72 votes

5y

@Alec P. I have properties sprayed quarterly from a pest control service. I've made friends with the pest control tech. He lets me know if anything looks out of line. Of course he isn't checking air filters but he does glance under sinks etc.. He will alert me to anything obvious that I should be aware of.

2 Reply

Linda Wright

Real Estate Agent · Member since 2018 · 39 posts · 23 votes

5y

@Alec P. Have you tried filter easy? This is a filter program that sends filters to the tenants

2 Reply

Account Closed

Investor · Singapore · Member since 2013 · 1k+ posts · 3k+ votes

5y

Class C tenants will treat your place like crap. Just expect it. Bribing them won't help and just create an expectation that you will always do that. Want better tenants, buy higher end properties.

5 Reply

Account Closed

Member since 2019 · 1k+ posts · 1k+ votes

5y

@Alec P.

Leave 12 filters there with the month written on them. Learn about scheduling in your email provider system. Schedule a reminder email to send you a pic of the new filter installed. Cc yourself on your emails. Do not open the cc. 3 days later Gmail will pop a reminder in red that you’ve not responded to this email, if you still haven’t got the picture requested now you u have to contact them and remind them.

Schedule an email for quarterly or bi annual inspections. Include a link to your booking system such as calendly or square etc. Cc yourself. Your phone will bing bong when they book the inspection. Gmail will remind you if they haven’t booked a few days later. At that point, you have to do some work and contact them.

Work hard at being lazy. Leverage technology. You seem to be making the job of property management far more time intensive than it needs to be.

5 Reply

James Lauer

Member since 2020 · 18 posts · 3 votes

5y

Wow a lot of great responses on here. I do think it is very important to make sure tenants are doing things like changing filters, turning off water to hose during the winter months (something I just had to do at my properties recently)

I do not think it is necessary to offer incentives as I think this could/will cut into your profits big time. HOPEFULLY if you have nice enough rentals and get quality tenants they appreciate it and will treat your property like it's their own. I think this is why tenant screening is SO important.

As someone else mentioned above, no one cares like we care and therefore that means we must take total responsibilities for our properties.

I forget the guest on BP, but he did offer gift cards for children who got straight a's or gift cards for birthdays or special holidays, that I do feel is a great idea, because it shows your tenant they are more than just a $$ in your eyes

1 Reply

Steven C kelly

Hampton, VA · Member since 2018 · 17 posts · 10 votes

5y

We do scheduled inspections. Also, we have filters delivered to the properties and have the tenants date the filters, and send us a picture of the dated filters installed in the filter housing

1 Reply

Bradley Scruggs

Investor · North Kingstown, RI · Member since 2015 · 65 posts · 33 votes

5y

@Alec P.

Some good tid bits and I fursure will be following this post. I really like the idea of giving them 12 different filters and doing the email reminder. They could be cheap filters but will save money in the long run.

Referring to recommendations on incentives, we offer our tenants a 50 dollar off the monthly rent if they do direct deposit, therefor not having to deal with chasing people down for rent.

Also stated above is screening the right tenant. The saying goes "you get what you pay for." if your property is a B or C class then those are the type of renters you'll end up getting.

Some good advice I received awhkme back was a buddy redid his kitchen DIY and he ended up putting granite VS laminate or butcher block, would be expensive right? If the renters have nice things they will want to keep them nice.

Hope this helps!

1 Reply

Shanell Law

Real Estate Agent · Los Angeles, CA · Member since 2016 · 24 posts · 21 votes

5y

@Alec P. It’s extremely tough when selecting a tenant. Honestly my experience is that you won’t truly know their personality until they move in. If they are needy and have a sense of entitlement of course they are going call you for all the small details. Changing air filters, batteries in smoke detectors and so on are a tough task for many tenants.

Speaking from experience many will simply put their best foot forward should you request images. A smart tenant will stage the photos. A savvy tenant will also know how to apply the various filters to hide damages.

Like you, I discovered a pet on the premises by appraisal images. But many tenants have no clue that appraisals involved photos that are forwarded to us.

Although the cost is low with Hulu and Netflix and others, I don’t necessarily think it will get you what you want.

I did however have a tenant request paint to repaint her unit. The unit wasn’t due for paint, but I purchased the paint for her in exchange for her committing to doing a better job maintaining the cleanliness of the yard and trash bin areas. So far so good. No more complaints from other tenants since. So find out what they desire and make a deal.

2 Reply

Justin Goodin

Investor · Indianapolis, IN · Member since 2018 · 1k+ posts · 756 votes

5y

Great discussion! Thanks for all of the helpful information!

0 Reply

Jonathan R McLaughlin

Rental Property Investor · Boston, Massachusetts (MA) · Member since 2016 · 2k+ posts · 2k+ votes

5y

@Alec P. keep in mind with stuff like HVAC filters you are essentially asking untrained tenants to care for the most expensive item in the house...any wonder they would be reluctant? And what if the unit broke after they touched it, even if it was unrelated? They are being rational not lazy. Too much risk for you and them.

Setting up any system of rewards is a waste I think. If you are looking for positive incentives then maybe send a small gift card after you were there and liked what you saw and a thank you note for taking such good care of the property. However, the very people who take good care of the property already are the ones most likely to respond positively to the gesture :) You can address stuff like this at renewal, too.

" While our standard procedure is to raise the rent 5% upon renewal, we have noted your care and upkeep of the property and would like to offer a lease renewal at a discounted 2.5% increase" or whatever numbers make sense to you.

0 Reply

Jay HinrichsBusiness Member

Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes

5y

Originally posted by @James Lauer:

Wow a lot of great responses on here. I do think it is very important to make sure tenants are doing things like changing filters, turning off water to hose during the winter months (something I just had to do at my properties recently)

I do not think it is necessary to offer incentives as I think this could/will cut into your profits big time. HOPEFULLY if you have nice enough rentals and get quality tenants they appreciate it and will treat your property like it's their own. I think this is why tenant screening is SO important.

As someone else mentioned above, no one cares like we care and therefore that means we must take total responsibilities for our properties.

I forget the guest on BP, but he did offer gift cards for children who got straight a's or gift cards for birthdays or special holidays, that I do feel is a great idea, because it shows your tenant they are more than just a $$ in your eyes

there was another thread this week on whether its a good idea to give a Christmas gift or something for thanksgiving.. I would say it was 90% NO and 10% yes..

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0 Reply

Michael Robbins

Property Manager · Henderson, NV · Member since 2018 · 501 posts · 317 votes

5y

@Alec P. You have an interesting idea here. If it is implemented across an entire portfolio I believe it could yield positive results. My implementation of the idea would follow a bit differently. So this is just an idea and I am brainstorming here, but I might include in the lease an "opt-in and "opt-out" HVAC filter program. If the tenant opts-in the filter program then the amount equal to the cost will be added to the rent each month. If the tenant opts out then they are required to send quarterly receipts of the filters purchased. If the receipts are not sent to the property manager then the filter program fee is automatically added to the monthly rent. Worst case scenario there is additional rent coming in. Idea needs refining.

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Incentives for tenants to better maintain property?

Incentives for tenants to better maintain property?

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