Motivation for tenants to pay rent?

[Nathan]

Any of you guys use certain ways as incentive?

Thinking of getting decent cheap appliances, or scratch and dent. Then rent them to the tenant for a nominal fee per month. Then offer if they pay rent each month on time, at the end of a 1 or 2 year lease, they can keep the appliances.

Thoughts? They'll steal my appliances anyway? :coco: :smx4:

 

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[MrPink]

"Motivation for tenants to pay rent?"

Eviction

 

[hakrjak]

Are you talking about a motivation to keep a tenant in your unit for an extended period of time?

I wouldn't reco doing appliances, because you need to own those to depreciate those bad boys... But maybe you could do a washer/dryer.... If they rent from you for 3+ years, the W/D is theirs to keep? You could also try renting them a big screen tv or something like that. Sounds like a fun idea, although most of your tenants are still going to move every 12 months because tenants are just like freaking gypsies.... So there isn't much you can do to keep them stable.

- Hakrjak

 

[RealOG]

That's what late fees are for.

The thing is, you shouldn't have to motivate a tenant to pay rent. It should be the first thing they do at the beginning of the month: before they buy groceries, liquor, car payments, etc. You need to make them understand it is a priority above all else.

 

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[SteveO]

Incentives like that can be fun but can lead to misunderstandings and problems down the road. I personally like to keep it simple with rules. As others have said, late fees and the threat of eviction should be enough.

 

[Nathan]

Kinda what I was expecting the response to be!

I'm just trying to look at it from a renters POV. People like you and I, people who are responsible with money, our first thing to do would be to pay the rent each month. But some people's credit/lives is so screwed up, I don't think threats of late fee's, or evictions or stuff like that phases them. Of course I know screening and finding good tenants is the best bet so as not to have these types of problems.

I'm just trying to think of stuff outside of the norm. I always see guys here as well as other forums speaking of tenant problems - and really I'm just curious if there are any actual solutions to some of the probs. Of course, that's briefly stated, as there are plenty of solutions, but they always prove the same results as before. Just looking for a little something different I guess. Maybe I'm too hopeful

 

[RealOG]

I think what you might find with fun and interesting incentives is that the only folks who take advantage of them are those who don't need them. You will end up giving freebies to the folks who are already paying on time.

That's one of the great things about apartment investing. Its been around for so long, someone has already thought of the best ways to do things. Its just a matter of putting them into action.

 

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[phlgirl]

There is a book out there - 'Landlording on Autopilot', I think? By Mike Butler

He has some really great, creative, ideas on how to retain a tenant and get them more involved in the process.

One particular idea I recall was something he called the 'All Star' package. When he moved a tenant in, he handed them a packet, with all sorts of information about his 'All Star' package. For example, if you pay your rent on time, you get a $100 credit voucher towards buying either the house you are living in currently or any of Mike Butler's other available homes. Each month your payment was on time, you received another voucher. In contrast, each month your rent was late, there was a penalty or deduction from your credits towards purchasing a home.

I can't remember exactly how it all worked but it was clever. We thought about implementing some of the concepts but found it would require a good bit of set-up and ongoing administrative work. At the time, we decided our efforts were better utilized elsewhere, but I can see how it might be effective. The idea of getting something for free, combined with the thought of owning your own home might get some people excited. If you were to implement something like this from day one, it might be less intense on the set-up work.

Of course, this example would only work for SFH or condos and not true apartments.

I would recommend picking up this book if you are looking for ideas which are more 'outside of the box'.

 

[CarrieW]

we had a landlord who had his rent at $700 per month.
you got a $50 discount if you paid by the first so if paid on or before the 1st it was $650.

then also if you were late(past the 5th) he charged a late fee as well. (from $700 not $650)

so if you were late (past the 5th) rent was $765. this allowed him to get his rent plus more of a late fee then allowed by law by doing the discount.

a $115 discount from ontime rent to a late payment was enough to keep us paid up by the 1st every month!

 

[hatterasguy]

Eviction works pretty well.

 

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[randallg99]

"Motivation for tenants to pay rent?"

Eviction

EXACTLY! Rep++++++++++++++++++++++++++++++++++++++

incentives to pay rent? WTF for??? they want a roof over their head, they negotiated a price and it's their obligation to meet the agreement they've willingly signed!

I read something very important some time ago- I hope others learn from this-

The odds of collecting from a tenant who is 20 days late is exponentially harder than collecting the rent if its only past due by a few days or a week.

In other words, once it goes past 20 days, you are much less likely to get paid if ever! Eviction is ultimately the best option at this point in the process.

 

[1mancrew]

Kinda what I was expecting the response to be!

I'm just trying to look at it from a renters POV. People like you and I, people who are responsible with money, our first thing to do would be to pay the rent each month. But some people's credit/lives is so screwed up, I don't think threats of late fee's, or evictions or stuff like that phases them. Of course I know screening and finding good tenants is the best bet so as not to have these types of problems.

I'm just trying to think of stuff outside of the norm. I always see guys here as well as other forums speaking of tenant problems - and really I'm just curious if there are any actual solutions to some of the probs. Of course, that's briefly stated, as there are plenty of solutions, but they always prove the same results as before. Just looking for a little something different I guess. Maybe I'm too hopeful

I like your thinking! Yes, eviction can be a motivation for some, but for others they don't care and will trash your place when they leave. It maybe something different for each case, such as a person that just split from the spouse and doesn't have a washer and dryer, microwave or a TV, this could be the best thing that has come along for them in a while if you were to help them get a start again. Each case is different!

It is easy to be cold to a lot of renters, but not everyone deserves that kind of treatment. :iagree:

Like I said, I like your thinking. :icon_super:

 

[Boo Blizzi]

lf your state attaches the unpaid water bills to the property...then under no circumstances put a washer and dryer in the property...i would go so far as to say not to allow it even if they buy their own...im telling u...every quarter i gotta fight with these tenants about the water bill (and its clearly stated in their lease that they are responsible for the water bill but if you dont pay it and let the water get cut off then they can take u to court for not providing water and heat in the unit)...u wanna motivate them to pay their rent...give them till the 5th to pay and if not then file for eviction on the 6th...they will say to themselves...damn dude dont play!! I learned that from an old landlord...he says if u cant afford to carry a vacancy for a couple months then u dont need to be in the rental business because its the nature of the beast...he also tells his tenants upon moving in that they dont want to borrow money from him cuz his rates are expensive (meaning they dont wanna pay late cuz they have to pay a late fee and reimburse him for the eviction filing fees)

 

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[reipro]

There is an easy solution for this. All you need to do is add an escrow for the water bill in your rental agreement. The tenant has to pay it every month with there rent. We have been burned many times on water bills so we are now smarter. Also add that if it has an overage it can be used for other things such as late fees, past due rent ect.

Hopes this helps!

David

 

[Boo Blizzi]

There is an easy solution for this. All you need to do is add an escrow for the water bill in your rental agreement. The tenant has to pay it every month with there rent. We have been burned many times on water bills so we are now smarter. Also add that if it has an overage it can be used for other things such as late fees, past due rent ect.

Hopes this helps!

David

i've had no luck in getting extra from a tenant on any given month for anything...they usually wait till the 2nd month after the bill is due to pay for the water...also if you collect in advance how do you know how much the bill is gonna be?...u could guestimate and then have them make up the difference but as i said...i have mostly sect 8 tenants and its like pulling teeth with them to get extras.

 

[reipro]

Is section 8 paying all of there rent? We do this at the begining of the lease. It is part of their deposit to get it started.

 

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[Bobo]

Nate...

Just a thought. I have made the mistake (often) in business to assume people are going to see the world as I see it. If you find this forum interesting, you are not 'normal', if we define normal as 'like most people'.

The rules/consequences approach is the way to go I think. The tenant should know that the landlord doesn't play around and that if life is tough then that rent better be first thing on their mind.

I heard it explained a different way - the minute you make allowances because of their problems then their problem becomes your problem. How's your banker's sympathy level if you tell her that the mortgage on that rental property is late because you had a bad break? If you don't hold the line on rents then you risk being able to keep the property and then someone else's problem is costing your family.

Probably sounds incredibly harsh to some, ridiculously harsh to those who've never been bit in the a$$ because they allowed compassion to oveerwhelm common sense.

As far as incentives to stay???? I doubt there are many. People are typically in an apartment for as long as it takes them to afford a house, get married/divorced, find a different job or in the case of someone I know until her astrologer tells her that her moon is in some damned thing and she has to move to find herself. Thing is, she moves every six months so it guess it makes sense that she doesn't know where she is.

Oh well, enough ex bashing, my point is that renters are transient by definition typically. The incentive I'd go with would be a big security deposit that they get back entirely if they don't trash your place.

 

[AroundTheWorld]

I heard it explained a different way - the minute you make allowances because of their problems then their problem becomes your problem.

rep + for this!!

in the case of someone I know until her astrologer tells her that her moon is in some damned thing and she has to move to find herself. Thing is, she moves every six months so it guess it makes sense that she doesn't know where she is.

:smilielol::smilielol: at this.

 

[Boo Blizzi]

Is section 8 paying all of there rent? We do this at the begining of the lease. It is part of their deposit to get it started.

i have 2 tenants that get 100% but most are partials...during the holiday season one of the tenants that sect 8 fully pays for readjusted her rent cuz her son was working at target or whatever and their portion was $160...im telling u...they were late every time... in fact they still owe me $70 in late fees from Nov and Dec...Luckily sect 8 put them back on 100 cuz they were getting the boot...So youre saying you charge a water deposit at the beginning of the leasing process?...hmmm something to think about...how much do you charge...the water bills are usaully in the $100-150 range...thanx for the idea

How soon after they are late do u file for eviction?...i give the sect 8 people leeway cuz i know im gonna get paid...if not they will lose their program and they fear that.

 

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[Runum]

How soon after they are late do u file for eviction?...i give the sect 8 people leeway cuz i know im gonna get paid...if not they will lose their program and they fear that.

I post the "Pay or Quit" notice 2 days after the rent is due. It has either resulted in them leaving or paying 100% of the time so far. FWIW, I have lost 100% of any tenants that I allowed to get 20 days behind. My fault and my lesson. I quit doing that last year. I now post the notice to get some quick response or action from them. If I don't take decisive action they won't answer the phone, they're never home to collect, and, if you catch them, the excuses will fly.

Once a tenant gets ANY behind they usually have no plan and no way for getting caught up. They don't usually plan. Most of them live paycheck to paycheck. Just my experience.

 

[Bobo]

I post the "Pay or Quit" notice 2 days after the rent is due. It has either resulted in them leaving or paying 100% of the time so far. FWIW, I have lost 100% of any tenants that I allowed to get 20 days behind. My fault and my lesson. I quit doing that last year. I now post the notice to get some quick response or action from them. If I don't take decisive action they won't answer the phone, they're never home to collect, and, if you catch them, the excuses will fly.

Once a tenant gets ANY behind they usually have no plan and no way for getting caught up. They don't usually plan. Most of them live paycheck to paycheck. Just my experience.

Not just your experience, pretty common. If you have ten bills and not enough money the fact is you are going to figure out the pain factor for not paying each bill.

Don't pay cable? Well, there goes Sportscenter, you'll live.
Don't pay Electric - one man's darkness is another's mood lighting
Don't pay AOL? Maybe those persistent bastards will finally delete the account you set up in 1989 and have tried to cancel since.
Don't fill the tank? Walking is good for you anyway and hell, it's Spring
Don't pay rent? You're under the overpass fighting a bearded guy named Slappy Joe for the best cardboard box while some bag lady makes off with your 3 wheeler shopping cart.

...not like you have to ponder this one folks. If you are the nicest creditor you will be last in line, period, end of story. For those who say this is heartless I completely agree. Businesses have balance sheets, people have hearts.