The holidays are here! The egg nog is flowing along with the cash, and you’d like to keep it that way. You have long-term tenants, and they’ve been great—they pay on time, rents are at market rates, and they communicate clearly and professionally.
Of course, you want to show them your appreciation and encourage them to stay longer by giving them a holiday gift—and what better way to show them some love than give them a rental discount for the holidays? Besides, who wants to be a Scrooge?
Is It a Good Idea?
Not so fast, you incredibly kind landlord!
When was the last time one of your business partners or your mortgage company gave you a gift of cash for the holidays? I’m willing to bet the answer is “never,” so why, as landlords, do we think that’s the appropriate way to show our tenants our appreciation during the holidays?
Don’t get me wrong: Tenants are the lifeblood of the rental property business, and showing them appreciation and treating them well is not only vital to your success but it’s the right thing to do. The biggest challenge here is that discounts and cash gifts tend to diminish the professional tone of the relationship. Providing a discount will blur the line between your relationship being a business and a personal one.
That said, there are ways to go about this and keep things professional.
The first thing to consider is that we have a contract with our tenants to provide them with a safe, quality place to live, which should always be the priority—actually, doing that is more than many landlords are doing in the first place, so if you are one of the good ones, you are already ahead of the game, and that’s an excellent way to show appreciation.
Secondly, as a landlord and property manager, I am a huge believer in the lease being a binding, two-way street. We expect our tenants to follow the lease implicitly, but many of us think the terms are optional for us.
Without going down a rabbit hole on that concept (that’s a different article), keep in mind that the lease requires the tenant to pay a specific amount of rent on a specific day every month. By giving them a discount of some sort, you are subconsciously telling them that the lease is flexible—that’s not a seed you want to plant.
So, What Should You Do for Your Tenants?
That being said, I am not saying you shouldn’t be kind to your tenants during the holidays—you absolutely should. On top of being an excellent and professional landlord, offering a gift of some sort during the holiday season is a kind thing to do.
If you know your tenants fairly well, a modest gift card to a place that interests them is fantastic. If you don’t know them well, a gift card to a local restaurant or shop is always nice. We’ve made it a habit in the past to deliver pies to our tenants as well. Even a simple, professional card wishing them a happy holiday season is more than 95% of the landlords would do, so don’t ignore that option at a minimum.
Don’t forget your tenants during the holiday season. Be the landlord that you’d want to have, but also don’t forget that you are running a business, and it’s absolutely vital that you keep things professional. The most important professional thing you can do as a landlord is to maintain the integrity of your lease by not giving gifts of cash or credit. Predictability, consistency, and reliability are vital in real estate investing.
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Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.