Tenant Referral Fees

by Property Management Software on January 6, 2017

Tenant Referral Fee Tenant Referral Fee

If you are thinking of someway to increase the occupancy rates without having to spend too much on advertising plans, then tenant referral fees are a great idea because you can get the whole community working for you as your brand ambassadors. Below are some of the most obvious advantages of employing a tenant referral program for increasing the occupancy.

  • Whether you have a large or small community it doesn’t matter because with tenant referral program your community of tenants will act as your brand ambassadors and will spread word of mouth. In short without spending anything they all will be working for you.
  • Good tenants will recommend good people. While this is not guaranteed, a general case is, a tenant who obeys lease agreement and pays the rent on time will not refer his unemployed cousin for a mere referral fee of $100.00.
  • Tenants will begin to feel that they are part of community and their say matters to the company and property manager.
  • Paying referral fees is lot simpler than giving gift vouchers and other gifts because you can simply deduct the amount of referral fee from the rent. This makes it very easy to process and chances of a referral getting lost are also reduced to a substantial amount.

While advantages of the tenant referral program are sure compelling, there are a few things mentioned below which need to be considered.

  • While most tenants will only refer quality leads, it is still important to check whether the referred tenant is qualified to rent your property or not which means tenant screening is still on.
  • Tenants must be aware of the rule. In order to receive the referral fee the referred tenant must sign the lease first. Merely coming to see the property does not qualify as a referral.
  • Some extra staff may be needed who can make sure that the suggested referral has signed the lease and the tenant who suggested the referral receives the referral fee.

If handled properly, tenant referral programs can be very beneficial for property management companies and for the tenants as well.

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