Christmas Gifts for Tenants

[invst4profit]

jwilbrin

I agree 100% with your perception of gift giving and take it a step farther.
I have never yet meet a tenant that did not secretly resent the fact that there LL is getting rich off of there monthly payments. None of them have even the slightest inkling as to the costs associated with owning a rental property. They believe everything they pay is profit to a LL.
Most LLs need to be careful of the perception of wealth they convey to there tenants especially in regards to personal vehicles etc.
My relationship with tenants rarely extends beyond providing clean safe accommodations prompt attention to there concerns and friendly conversation.
I have never given xmas gifts although I do send out cards and in the event of the death of a tenant I send flowers to the family.
Last year I received one xmas card from a tenant so that tells you where the relationship stands.
Unless the relationship extends beyond tenant/landlord I see no benefit, reason or expectation to send gifts. I see no financial return in someone receiving a gift from a semi stranger.
I have never heard of such a thing beyond this group and do not see it as a practice I would have any desire to adopt. I only see it as an unnecessary added expense.
On the other hand if I was in a business that had something like small fridge calendars with the business name on it I would send something like that to customers.

 

[mponte]

I actually disagree with Greg as we usually give $50.00 gift cards to the Bay/Sears and have had very positive feedback and thanks from our tenants.

My opinion is the opposite holds true that if your tenants are not expecting something then they are thinking typical landlord or scrooge. By saying thanks and giving your best wishes by providing a small gift during the holiday season is what differentiates you from the common landlord. At the end of the day, it`s the small things that count in a tenants mind and if your dealing with their issues in a timely fashion and you or your property manager are courteous, caring and respectful to them....why would they want to leave.

The gift is a small token of appreciation and thanks and when they are giving you over $10,000+ a year in rent it`s a small investment to make them happy.

My thoughts.

 

[Sandy Fransham]

Hi all;

Last year I gave movie passes, one for each person living in the house with a minimum of two passes per suite. I gave this along with some Christmas baking. This year I have gone with little helpers gift baskets.

Movie passes can be bought cheaper if you buy them in bulk!

Sandy

 

[JoeRagona]

QUOTE (invst4profit @ Nov 23 2009, 02:28 PM) jwilbrin

I agree 100% with your perception of gift giving and take it a step farther.
I have never yet meet a tenant that did not secretly resent the fact that there LL is getting rich off of there monthly payments. None of them have even the slightest inkling as to the costs associated with owning a rental property. They believe everything they pay is profit to a LL.
Most LLs need to be careful of the perception of wealth they convey to there tenants especially in regards to personal vehicles etc.
My relationship with tenants rarely extends beyond providing clean safe accommodations prompt attention to there concerns and friendly conversation.
I have never given xmas gifts although I do send out cards and in the event of the death of a tenant I send flowers to the family.
Last year I received one xmas card from a tenant so that tells you where the relationship stands.
Unless the relationship extends beyond tenant/landlord I see no benefit, reason or expectation to send gifts. I see no financial return in someone receiving a gift from a semi stranger.
I have never heard of such a thing beyond this group and do not see it as a practice I would have any desire to adopt. I only see it as an unnecessary added expense.
On the other hand if I was in a business that had something like small fridge calendars with the business name on it I would send something like that to customers.

Greg, jwilbrin,

You may be missing the point here. With regards to the tenant resenting the fact I am `getting rich` from him/her, we actually "discount" the rent upon renewal. You see, I evaluate my properties at a high stress level that generates enough cash flow from day one. The gifts tell the tenant that I appreciate them and view them as a person and not a `tenant`.

The discount in rent solves two immediate problems: alleviates resentment of `normal` yearly price increases that are mistakenly "making me rich" and is a monthly `gift` reminder that I am adressing thier money issues.

Two: they receive this `discount` only if the payment is in by the first AND nothing is ever NSF. Once that happens they lose the discount basically.

And maybe a THREE, I can then raise the rent the year after without much resistance - and I would probably do that very slightly.

You see to me having strong reliable clients is the most important things and there is such a thing as a `loss leader` in any business. Since I have only known how to startup and run my own companies all my life, my main focus has always been about the customer - without them we have no business.

I respect Don`s outlook on appreciating our clients and embrace that fully - I would have not thought about this action otherwise if I had not joined this organization.

That said, what works for one, may not for another - stick with what is working for you.

I do however agree with the perception the tenant has when you meet with them - I for one try to stay away from meeting them driving my car or admitting I am the ONLY owner.

Much respect.

 

[MarkTorgerson]

QUOTE (invst4profit @ Nov 20 2009, 09:14 AM) <br />Personally I have too many tenants to give gifts. Luckily for me though none have complained yet.<br /><br /><br /><br />

How many is too many?

 

[invst4profit]

I understand the reasoning behind giving the gifts but question the value in payback.

The relationship I have with my tenants, which I believe is good excluding "problem tenants", combined with my business practices designed to address individual needs promptly makes gift giving unnecessary as it would not generate any positive financial gain or necessarily improve my ease of operation of the business.
As far as annual rent increases are concerned, in Ontario, tenants expect it so I do not see this as something that a LL should need to cushion.

I see gift giving as more of a warm and fussy feeling generator than anything else which may be a positive thing but not part of my practices.

(Problem tenants being those that hate me for no other reason than the fact that they are A** H***s. I prefer to encourage them to leave as opposed to wasting time and money trying to turn them into good tenants).

Mark: 33 doors.

 

[AndyLuchies]

I don`t have Greg`s problem because all my tenants are RTOs and all of them have expressed gratitude that I am helping them get a house. They see me as going out on a limb and doing them a favour. I think a good christmas gift will put me over the top in their books.

 

[stevegwhite]

QUOTE (jwilbrin @ Nov 23 2009, 01:54 PM) In a case where a tenant or tenants have been inconvenienced due to maintenance issues such as a furnace problem in winter, then I will give them a little more. Maybe a $50 restaurant certificate so they can go out for dinner while my contractors are working in their unit.

I really like that idea! Takes some of the wind out of a complaint of inconvenience, I`d think.


QUOTE (JoeRagona @ Nov 24 2009, 11:34 AM) we actually "discount" the rent upon renewal.

they receive this `discount` only if the payment is in by the first AND nothing is ever NSF. Once that happens they lose the discount basically.

Can you explain the discount for renewal a bit? How much do you discount and how do you present it? Do you call them with a `thank you` for being good tenants, or do you send them a letter with a description of the discount and how they could loose it?

Thanks,
Steve

 

[JoeRagona]

QUOTE (stevegwhite @ Nov 30 2009, 12:15 PM) Can you explain the discount for renewal a bit? How much do you discount and how do you present it? Do you call them with a `thank you` for being good tenants, or do you send them a letter with a description of the discount and how they could loose it?

Thanks,
Steve

When time comes to raise their rent, we have them sign the new lease with the increase included. Example : they paid $1000 and now the new rent will be $1025. The lease SAYS $1025, but there is a clause that indicates we will CREDIT them $25 per month as long as they stay within the guidelines. Paying on time, no NSF etc. If they do not, the lease is already signed with the allowable increase and I can raise it immediately.

 

[stevegwhite]

QUOTE (JoeRagona @ Dec 1 2009, 09:34 AM) When time comes to raise their rent, we have them sign the new lease with the increase included. Example : they paid $1000 and now the new rent will be $1025. The lease SAYS $1025, but there is a clause that indicates we will CREDIT them $25 per month as long as they stay within the guidelines. Paying on time, no NSF etc. If they do not, the lease is already signed with the allowable increase and I can raise it immediately.

Ah, so you always renew leases? I know they automatically continue monthly on once the first year is up. I guess renewing locks them in for another year.

 

[invst4profit]

Although they have a lease they may still give 60 days notice to leave the same as month to month.
The RTA applies the same whether on lease or month to month.

 

[stevegwhite]

QUOTE (invst4profit @ Dec 1 2009, 12:12 PM)
Although they have a lease they may still give 60 days notice to leave the same as month to month.

The RTA applies the same whether on lease or month to month.




I guess that applies for the first year of the lease as well as renewed leases?



What is the benefit of resigning a lease after the year?

 

[invst4profit]

I see no benefit in resigning a lease in Ontario except for a false sense of security on the part of the LL.

Some may believe leases are an opportunity to add special clauses but due to the fact that they do not hold any credibility with the LTB they serve little purpose.
A major change in rent, such as additional charges or changing from utilities included to utilities extra would require a new lease but a tenant can not be forced to agree to changes.

Aside from annual rent increases the original lease stands for the duration of the tenancy.

This is the reason I dislike long term tenants as I believe they are a liability in Ontario.

 

[stevegwhite]

QUOTE (invst4profit @ Dec 1 2009, 02:31 PM)
This is the reason I dislike long term tenants as I believe they are a liability in Ontario.




Interesting point. I've never heard of anyone looking at long term tenants that way.



Depending on how many tenants you need to juggle and how many upgrades you're looking to do, I can see your point.



As a long term renter turned owner turned rookie LL, I can see the psychological motivation for the renter to try and stay within the requirements of discounted rent. Bills are usually fairly tight and $25 would probably be viewed as the value of basic cable or a large portion of a monthly cell phone bill.

 

[invst4profit]

Ontario`s a tough market to run this business in. What with a anti LL LTB, tax hungry government, rent control, tenant advocacy groups, free legal aid, too many tenants with an entitlement mentality and the proliferation of professional tenants LLs must be more aggressive and strictly business minded to survive.
Long term tenants, to some, are easy to manage requiring little hands on involvement and less stress but also less true cash flow as rents fall behind markets.

I prefer to take a aggressive hands on business approach and maximise my income whenever possible.
Annual rent increases are expected from me but I still require turnover to keep in step with market rates.
I also apply to the LTB for above allowable rent increases to cover such items as increased utility costs, capitol expenses and increased property taxes.
Every penny is $3.96 more per year income to me and increases the resale value of my property by $396.00 (my particular property type generally sells at or higher than a 10 cap).

 

[Nir]

QUOTE (invst4profit @ Dec 1 2009, 03:09 PM) Every penny is $3.96 more per year income to me and increases the resale value of my property by $396.00 (my particular property type generally sells at or higher than a 10 cap).

I think you meant $39.6, not $396.0 However, that is usually not the case either. 10 cap means property resale value increase of around $19.8, not $39.6. the reason is you forgot your own great rule of thumb: expense = around 50% of rent. ---> cap = 1/2*rent/property value.
---> 1 Dollar increase in annual rent = $5 increase in property value.

 

[invst4profit]

Your right, that was a sloppy calculation on my part. I was rushing to get away from work.
Or maybe just my runaway ego inflating my income again.
$396 sure would be a good return on a penny though.

My point was, I guess, that I run a tight business to capture all available income
and limit unnecessary expenses. Where others may concentrate on expanding investment
opportunities I concentrate on the one I have. I have scaled down to make my
exit from the business by age 65 while at the same time I am starting up my reno/flip venture
as a side line business.

 

[Nir]

QUOTE (invst4profit @ Dec 1 2009, 07:30 PM)
I concentrate on the one I have. I have scaled down to make my

exit from the business by age 65 while at the same time I am starting up my reno/flip venture

as a side line business.




Nice. GL!

 

[Anonymous]

I give $50 gift cards for the local grocery store. One tenant was thrilled and mentioned that they never had a landlord give them anything for Christmas. That`s the point, right? Keep `em happy because they`re our customers. When I look at how much they pay us, I think $50 isn`t much really...and it goes a long way.

 

[JoeRagona]

Thanks jlee for bringing this thread back to the original intent.

I am a true believer of investing in your business. Since I have only run companies my entire life, I can only try to understand those who are now investing in their own business for the first time and keeping as much of their personal money out of it as possible (or trying to keep every dollar to themselves) There have been YEARS of personal money being pumped into my businesses with many weeks of zero pay. That was only to gain and keep customers in the end by increasing marketing, advertising, promotions etc.

For a small appreciation gift considering what tenants pay in rent for the year, it`s a great way to try and KEEP those good customers. When a not so good tenant is thrown into the mix, we should have our systems in place to remove them from our stream.

Focus on positive energy and moving forward - like attracts like and when you give, the more you receive. In ways you probably don`t even realize.