All Forum Posts by: Allen Gross

@Jason G.

What an amazing and insightful post! I was growing their listings yesterday and got interested. This experience you shared is invaluable. Thank you very much for the time and effort you put into this post!

Thank you everyone for so much valuable insight. Everyone has made extremely valid points and showed me I may have a fairly skewed view on how people would take the gift.

One of the many concerns would have been that after the first gift the tenant or tenants might start demanding I lower the rent 1/12 instead of gifting them a free month.

Thisnhas left me a lot to think about but I can definitely see it would not work out like I thought it would work out.

P.s. I would like to have responded to each of you individually but I don't want to inflate the post with 4 it 5 of my own replies at a time.

So thank you @Jonathan R McLaughlin, @Jason G. , @JD Martin, @Justin Sullivan, and @Steve Milford.

 Thank you Tim. With the very few times I have ever been a tenant and never once having eceived any sort of thank you and then hearing the podcast, it sounded amazing. Giving back that is. Now, of course, I don't see it as a necessity or owed, but the giving back seemed intriguing.

The legal factors or possible tax consequences are also a fear. I would hate to be generous and find out my gift was taxable for the tenant. That would be exactly opposite of the goal.

Thank you for your input. The bbq and party sound amazing and could obviously have the same effect with extremely less pact.on my bottom line.

Thank you.

 I did actually mean 1/12 the monthly rent, but again this is assuming the cash flow was already high.  The basic, very basic idea, is I would take a hit on my bottom line and not only provide a service but also force myself into more aggressive strategies of acquiring more properties to cover the overall cut of monthly cash flow.

As you say though,  some may take advantage.

You have given me a lot to think about.

Thank you.

The headache is what makes me worry this is a horrible idea! Thank you for your insight. It is great to have a resource like BP to allow me.to connect with people who are experienced in REI.

Thank you.

Thank you for your insights, the reason I was considering something I had never heard of was because I heard on another podcast a group was also working help tenants save money (like actual savings accounts) to help the tenants build stronger futures.

I love the idea of helping people and of course providing a safe environment to live in is doing that.  Me being generous doesn't change the person on the receiving end, most likely,  or their habits, but that is why I put my idea out there so I can receive valuable input.

Thank you.

Listening to various podcasts, one of which is BP Podcast 356 with Joe Asamoah, that talked about landlord and tenant relationships got me thinking. Joe gives out gifts and flowers and such to his tenants. I really like that mentality of providing a service for our tenants. I think this is simply amazing.

Now, I am wondering if say you were doing well in your cash flow from every door you owned. Hypothetically +250$ per door, and you took 1/12th of the tenant's monthly rent, each month, and put it somewhere in your LLC. (in other words your bottom line allowed you to work a little bit harder to get some more doors and still live off your passive income) Then at the end of the year (I would choose December 1st, or maybe November 30th) you gifted them the amount back for the previous 12 months, do you think that would:

A. Build Extreme tenant loyalty (technically a month of free rent)?

B. Maybe anger them if you didn't tell them you would do it and the way the system worked. (Which would be since the day of lease signing, each month you set that 1/12th aside to pay out that November or December with a note stating: Thank You for being a superb tenant! (or something more personal)?

C. NOT ASKING FOR LEGAL ADVICE.... possibly be illegal in some states or areas?  I think gifts are not illegal anywhere. Obviously I would have to go over this with legal counsel before I ever even thought about doing it. 

Anyway, I ask because I had a conversation with a co-worker that I would always try to work with someone that hit on tough times if I could, and a crazy idea like this might really put a smile on my tenants faces and better yet, provide even more loyalty to produce less tenant turnover. 

Now overall this would obviously mean I was charging less than current rental rates because even if I was at the current rate for my property, I would be giving them back 1/12th their rent per month at the end of the year, but if they stayed loyal and took care of my property and also with this gift every year would likely feel less upset over annual rent increases.

Thoughts?