In Property Management,Which is Better, the Carrot or the Stick?
At our property management firm in Jackson County North Carolina we go on the theory that the choice of the carrot is much more satisfying for everyone.
Beyond our standard services we offer our property owners a unique program designed to attract and keep the best residents and to reduce vacancy periods. We call this, The Leading Landlord Program and provide it as an option to all our property owners. We market the program as a payoff in long term reduced property owner costs.
We do discount the advertising fees for property owners enrolled in the Leading Landlord Program but these are not their only savings. The major savings come to the landlord indirectly through improved resident satisfaction, future resident referrals, advance notice of vacancy, and better cared for properties by residents who have more respect and appreciation for the property.
Leading Landlord Program
Here is how the program works. There are no additional upfront costs to landlords who enroll in the Leading Landlord Program. The costs of being in the Program are charged to the landlord at the time of service and are deducted from rents collected.
Leading Landlords know that the “carrot” is often much better than the “stick” when it comes to reinforcing desirable resident behavior. And, therefore, Leading Landlords are proactive and willingly put forth the expense to reward the good behavior of excellent residents because it pays off in savings in the end.
On behalf of the Leading Landlords we offer their residents a 5 Star Rewards Program. The residents in this program via the landlord’s enrollment in the program know of the possible rewards before signing the lease. We want them to know that quality behavior is appreciated and rewarded so that they have incentives to behave like the quality residents we want in our landlord’s property.
The Five Stars
1. The first Star rewards the qualified resident for being selected as a resident. On behalf of the Leading Landlord, a house-warming gift, which is something like towel sets, candles, and/or cleaning supplies is provided the new resident at the time they take possession of the property. The Leading Landlord is charged $25.00 for this reward with the charge taken out of the resident’s first rental payment.
2. The second Star rewards the resident who takes care of the property. On behalf of the Leading Landlord, residents who obtain a score of 90 on each home inspection report are given a gift of appreciation. The Leading Landlord’s account is charged $25.00 for this reward.
3. The third Star rewards residents who renew their lease on their anniversary. Each anniversary, on behalf of the Leading Landlord, renewing residents are given an anniversary present. The anniversary present is a choice of 3 attractive customizations to the property. The property owner is the one who selects 3 possible customizations (up-grades/property improvements) they would like to have done to their property. The property improvements could be something like installing a medicine cabinet in a bath that has only a wall mirror. It could be the addition of an over the range microwave, installation of a dishwasher, or installation of a ceiling fan. Whatever the Leading Landlord selects, the resident is given the choice of one as their reward for renewing. The cost to the Leading Landlord for providing this incentive varies depending on cost of the improvement. Steed Talker Realty & Investments coordinates and oversees the improvement work just like with standard repair and maintenance so it is hassle free for the Leading Landlord.
4. The fourth Star rewards residents, on behalf of the Leading Landlord who find they must leave but who give 60 days written notice of their departure. When given 60-day notice and a qualified resident is in place before the current resident’s departure, the departing resident is rewarded with a $50.00 move-out bonus on top of whatever security deposit is due. This Leading Landlord reward insures that advance notice of a vacancy is given and the stipulation that we must have a qualified resident in place for them to receive the reward insures that the current resident will be cooperating in the showing of the property to new prospective tenants. This reward also encourages referrals from current residents who want to see that the property is rented to a qualified resident before their departure so they can claim the reward.
5. The fifth Star rewards the resident for timely payment of rent. The resident earns points for on-time payment and the points are credited to the tenant’s account as a new homebuyer credit. If the resident is late, all points are wiped clean and the point accumulation begins anew. The number of points accumulated by the resident determines the amount of the reward. The reward is capped at $300 and awarded to the resident after all costs of vacating the property are covered. The $300 is the maximum cost that would ever be charged to the landlord and is only charged when the tenant vacates the property and leaves it in excellent condition.
Though all these incentives benefit the property owner they are also good for us as property managers. The program keeps residents happy and that means we have less of our time taken up with complaints. Getting the 60 day notice is not only beneficial to the property owner but it helps us manage our business by giving us time to prepare in advance for up-coming vacancies.
Upgrades for renewal are good for the property owner because it helps them to think in terms of what improvements are needed to help the property to be more rentable. It helps us because the more attractive the property the more it attracts the kind of tenants that we want to work with. And, let’s face it, the more attractive a property the easy it is to get it rented which reduces our administrative load.
The new homebuyer credit is applied towards the purchase of a new home. The stipulation for the tenant is, to receive the credit they must purchase the home through our firm or an associate firm (referral). The tenants like this reward whether they ever use it or not, it makes them fell good that they are being recognized and rewarded for quality behavior. It also helps us stay in contact with former tenants. So it works for everybody.
We like WIN-WIN-WIN Carrots-Carrots-Carrots.
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