Creating Long Term Tenants
As a full-time Canadian real estate investor, we need to continuously create deals to facilitate both massive and passive income. We need to have deals that turn over quickly, building our massive income component. We build a portfolio of properties which gives a regular passive income. We also need to have deals where both elements are key factors in the process.
When we find ourselves in the likely event of being a landlord, there are many ways to make this a much more pleasant experience. Most investors who are landlords do not enjoy the job. They do not really like their tenants, don’t like the maintenance and generally have a hard time of the whole process. There are many ways to make this process more hands off, less labour intensive and thus more enjoyable.
Keeping your tenants for a long time through incentives.
Now, this is not to put anyone down, people have to rent because either they are in a financial situation that has been caused as a result of a failure in their life (such as a marriage failure), or they have poor spending habits, or are in a low-paying job. They are not bad people necessarily: I say that there are no bad tenants, only bad landlords. The landlord creates his own environment.
There are ways of creating a better landlord-tenant relationship and a much more loyal tenant base. This is by utilizing incentives.
What kind of incentives do I mean?
They don’t have to be expensive or labour intensive but go a long way in solidifying good tenant relations.
1. Note tenant birth dates and the tenant’s children. Recognize those with, at the very least, a card, a bottle of wine, or a gift certificate for a dinner. It may cost $50, or even $100 dollars: but it is a small amount to pay to get a very, very appreciative and happy tenant. Not to mention that it is a write-off for your business.
2. As we all know, repairs are a huge part of being a landlord, and can really affect our bottom line greatly. I give my tenants a repair request sheet, so they have to outline what is the particular repair, when did it happen, how long has it been happening, etc.
They sign it and date it, then send it to me. I then tell them “if I have not taken care of this repair within ten days, I will rebate you your prorated daily rent after the ten days, until the repairs are complete.”
This incentive gives the tenant the assurance that the repair will be done, and done on time. If it isn’t then they will be getting money back. This builds confidence as a win-win situation, and builds a bond between you and your tenant.
3. If there has been no repairs within a year, (meaning if the tenants has done their own little fixes), then I will give the tenant $100. This could be in the form of a gift card. (you have to inspect the property before giving the gift card)
So create a better situation between you and your tenants by creating incentives, and you will have a happy long-term tenant and a good relationship.
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