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Is it better to give than receive?

November 23, 2012

My wife and I were discussing whether we should provide gifts to our tenants this year. You see this in some RE books as a tactic to retain more long term tenants. I have talked to other landlords that do this, but I am torn on this tactic. It sets an expectation that you will do it every year. I also feel it can blur that line of tenant to landlord relationship.

My thought was perhaps a card, but nothing more than this. At the other end of the spectrum is say $50 off the rent. I really don’t like this. I prefer tenants always pay the full amount of rent every month – no exceptions. In any event, $50 is too much. If you go with a cash gift, I say no more than $25. I have also heard some say you should get them a gift card at Home Depot and maybe they will use it to improve your property. I would like to think they would spend it on a tube of caulk, cleaning materials, or AC filters – but with my luck they would buy wallpaper and roll a bathroom.

I read somewhere else a batch of homemade cookies shows some thought. This seems like a nice gesture that is economical, but somehow a little too comfy for my liking. It’s not like I am all business – I am very friendly to my tenants and stay and chat for a few minutes when picking up rent. But with decent tenant retention now – I hate to mess with it.

The question is, Will a small gesture around the holidays, make a difference? My wife thinks so. Her exact words, “Most landlords only want the check each month, but this signals to them that I care about them as an individual too.” She has been better than me when it comes to tenant management – so perhaps she is right. This will certainly differentiate you from the many apartment complexes, tight landlords, and really stiff property management companies. And don’t forget – it’s deductible.

So we went through our current tenant base and feel 3 of our 8 tenants are worthy of a gift this year. These 3 have been with us for over a year, never late on the rent, and we definitely want them to stay. We excluded our refugees from Iran as they don’t celebrate our holidays and might find this awkward. We have students in another property, but this would not sway them to stay longer. Our other tenants have been with us for less than a year or are not ideal tenants.

Our plan is $25 Walmart gift cards. I will take notes on any perceived results and post about this later.

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From → Landlord

6 Comments
  1. Another Investor permalink

    I would not omit the Iranian refugee tenants if they would otherwise make the cut. I live in a diverse neighborhood, and I have both Muslim and Sikh neighbors on the cul de sac. While they do not celebrate Christmas, both families give small gifts of food or other items to their neighbors at Christmas. I think it’s part of recognizing and celebrating their acceptance into a different but tolerant culture.

  2. Another Investor,

    Perhaps I should include them. They are just so unique that I am afraid they would try and reciprocate with a gift. They have already been with me for 2 holidays and I have not given them anything. In effect they have already gotten a gift for me, when we renewed their lease and dropped the rent in exchange for prepaid quarterly rent and a 24 month lease. I wrote about this in another post a year or so ago.

    They are always very respectful and are quite happy in the home. I would hate to introduce something that might change the current relationship in some way. I will just wish them a happy holiday season next week when I pick up rent.

  3. I like your Walmart card idea. I usually give a $25 Target card to my tenants.

    I might be inclined to give the students a gift card too. It may not extend their stay, but it may nudge them in the direction of taking better care of your property.

  4. Chuck – I just found your blog yesterday. Thank you for sharing such detailed information on this excellent blog. Tremendously helpful for those of us out here just getting started. Much appreciated.

    One idea (maybe for next year) would be an Entertainment coupon book. The book for the Dallas area is around 20 bucks on their website, with a Retail price in stores of $35. I’ve given those as gifts to friends/family for years, and they are always blown away by how much money they can save. Reminds them of your gift all year long.

    Jeff in San Antonio

    • Jeff, thanks for stopping by. That is a good idea…we always have friends trying to sell us one of those…we usually buy one too.

      • Chuck – Not sure if this email Reply will make it to you, but wanted to ask if you’d read “Landlording on Auto-Pilot” by Mike Butler? He has some great ideas on SFR that you may enjoy perusing. I attached a PDF copy…not sure it will make it through the WordPress email screen, though. Jeff in San Antonio Date: Wed, 23 Jan 2013 23:24:52 +0000 To: jeffdavidson@msn.com

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