Vacancies in your building cost anywhere from $1,500 to $5,000 a month when you factor in all associated costs. Keeping the good tenants you have is always a better option than finding new ones. Any way you can foster good will with your tenant is time or money well spent. Gift giving, when done well, is one of these opportunities.
Benefits of Gift-Giving
Giving a gift to your tenants can help create feelings of good will. If you have good tenants, you want to keep them. If you have mediocre tenants, you want to encourage them to be better tenants. Either way, your gift is going to improve your relationship.
Also, tenant gifts are tax deductible, within certain limits. Nolo indicates that deductions on tenant gifts are limited to $25 per person per year, however.
How Much Should You Spend
While you want the gift to be substantial enough to make an impression, you don’t need to spend a fortune. Often landlords will tailor the gift amount to the type of tenant, the amount of income they make from the unit and their payment history. Also, plan for the number of units you have to ensure that you can give something to all of your good tenants.
Keep in mind that some tenants will feel the need to reciprocate, so if the gift is something they know the cost of, such as a gift card, keep it within the $10 to $50 range. For gift baskets or tangible gifts that do not have an obvious price tag, more is appropriate if your budget allows.
Gift Ideas for Tenants
Gift ideas for tenants include:
- Gift cards – Restaurants, local grocery stores, movie theaters and local retailers are all excellent ideas. Tailor the gift card to the type of tenant. Restaurant gift cards are good for young couples, while grocery gift cards are appropriate for college students.
- Gift baskets – Gift baskets can combine flowers, food, candy, beverages and lotions in one festively wrapped package. Gift baskets are a great option if you are trying to stay close to your $25 tax deduction limit.
- Money off the rent – Giving your tenants $50 off next months’ rent is a gesture they will appreciate, but be very clear with your intent with this one. The Apartment Owners Association of California warns that it can confuse tenants and be viewed as a permanent, not temporary, discount.
- Candy – Landlords who don’t have the budget for pricey gifts can buy bulk candy and wrap it festively. This costs little but shows the tenants you appreciate them.
- Professional house cleaning – Most people appreciate a professional house cleaning from time to time, and this gives you an added benefit of ensuring that the property is deep cleaned once in a while.
- Gift that stays with the unit – Offer to paint a room and let them choose the color, upgrade an appliance or even add patio furniture to the outdoor space. If you are planning an upgrade like this to your units, plan it around a gift-giving time to use it for both purposes.
- Tenant party – If you have a number of tenants and don’t feel that individual gifts would suit you well, throw a party for the entire property. Pick a weeknight and throw a party in the lobby of your unit so it’s convenient for your tenants to attend. This not only shows appreciation for your tenants, but also creates a sense of community in your building.