Like any other business, multifamily properties have to provide desirable incentives to obtain and retain customers. And with competition being so high as of late, every property is looking to stay one step ahead of the others in the area. Having updated units and new amenities isn’t enough anymore, so properties have started offering various types of incentives to new and current residents to combat lower vacancy rates. Here are a few effective incentive programs to gain and keep quality tenants:
Early Payment Discount
Make paying rent attractive by rewarding tenants with a discounted rent for early payment. Even if it’s a small amount like $10-15 off their monthly rent, proactive tenants understand the discount can add up to a nice sum of cash at the end of the year. In addition, the early payment incentive helps lower delinquencies and attracts residents that are more likely to pay rent on time. It’s nice collecting extra cash from late fees, but that’s not the type of revenue, nor the target audience owners should rely on. Allowing tenants to pay rent online provides extra encouragement to pay early as they can send in their money electronically from the comfort of their home, or on the go.
Another fun way to reward early-bird payers is a monthly raffle. Anyone who pays their rent early gets their name added to the raffle, and at the end of the month the name drawn wins. Prizes can range from dinner and a movie for two, to gifts cards, or a free car wash. Furthermore, if it’s the holiday season, some popular prizes are a free turkey for Thanksgiving dinner, or a HoneyBaked ham for Christmas eve. The raffle program can be fun for everyone involved, engages the community, and is a great incentive for residents to pay rent early.
Tenant referral fees are an excellent way of bringing in qualified residents while saving money on advertising. A tenant referral program offers numerous benefits. Renters are motivated to act as ambassadors for their property by spreading the word of the advantage of their living community. Also, good tenants tend to know reliable people. This may not always the case, but there’s a high chance a tenant who regularly pays rent early or on time will not refer someone they deem unqualified or untrustworthy. When a tenant refers someone who signs a lease, their reward can come in the form of rent credit, unit appliances like a television or microwave, gift cards, or even cash.
Lease Extension Once a tenant has proven to pay rent on time and take good care of their unit, the next step for management is to retain that tenant for as long as possible. Offering a reward for lease renewal is one of the most effective ways to achieve high rates of tenant retention. In general, tenants prefer monetary incentives, so lowering their rent will give them most motivation to stay. If there is no wiggle room on rent rates, giving tenants unit upgrades is a good substitute. Returning tenants often like to move into a newly renovated unit, but if there aren’t any available, upgrading their unit with brand new appliances has proven to suffice. Also, if the unit has the necessary connections, provided washer and dryers are in very high demand. Ultimately, management should do everything they can without breaking the bank to keep their best tenants.