Successful companies know that it is important to pay attention to their clientele. To keep clients happy and encourage a continuing relationship, they provide gifts, discounts, and more. In short, they go the extra mile with rewards to promote continuing income.
Without a tenant, the property owner has no income; the tenant IS the client. Your property investment IS a business. When you treat it as one, you realize that it may be profitable to provide additional rewards for good tenancy to increase your return on investment (ROI).
Resident & Property Owner: A Business Relationship
A tenancy begins with a contract between property owner and tenant. The tenant agrees to pay their rent on time and take reasonable care of the property. The property owner agrees to reasonable rent expectations and maintaining the property in a safe and habitable condition. If both parties live up to their agreement there should be a successful tenancy.
If everyone is living up to the contractual agreement, why should property owners consider providing additional rewards to their residents? It may not be necessary but small gestures or incentives can promote continuing income for your investment business.
Make it Beneficial for You AND the Resident
Rental markets are volatile, swinging up and down just like the stock market. It pays to remember that while the property owner may be king one day (low number of vacancies available) the market will swing and give more control to the tenant the next (higher numbers of vacancies available). Rewards or incentives can make a difference to tenants when considering renewing their lease or simply continuing their month-to-month agreement.
Tenants are more mobile then homeowners are. If they feel their current rental is not worth the hassle they will consider moving. Did the property owner authorize the repairs requested? Is the owner reluctant to do the little maintenance items but waits for them to become a big problem and major inconvenience? Tenants consciously or subconsciously make judgments and if motivated enough, will move. If they see that the property owner held up their end of the rental agreement and provided unexpected rewards, they may be less inclined to move.
There is also the human element to consider. People like respect and attention. When the property owner upholds the tenant's right to occupy the property without unexpected intrusions, listens to all requests, and provides additional incentives, the landlord/tenant relationship is stronger.
Fewer property turnovers = less expense and an increased return on investment (ROI).
There are so many small ways to reward tenants throughout the year. Sometimes something simple, such as a thank you note for their cooperation during difficult maintenance issues, can help. It could be the installation of a ceiling fan, a free cable connection, a gym membership, a gift certificate for a local grocery, or the promise of a turkey or ham during the holiday season.
Some rewards can be more expensive but worth the expense. For example, a new energy efficient dishwasher can save the tenant money on utilities and help to reduce their monthly costs. This can make it much easier to issue a reasonable rent increase. Remember, these expenses, small or large, are tax deductible if legitimately spent on the investment property (just keep accurate records).