It's holiday time once again. Although the 2020 holiday season might not be as festive as usual because of the coronavirus, we're still giving gifts. And that always brings up the question for many as to whom to tip or give a bonus. Teachers, mail carriers, and school bus drivers are common recipients of holiday bonuses, but what about your property managers? Should you give them one, and if so, how much?
Should you give a bonus?
The landlord house is divided on whether to give a bonus to property managers. Some property management firms consider themselves in a league with professions such as doctors, accountants, and lawyers. Property management firms such as these do not want or expect a bonus from you. But other property managers would very much appreciate a holiday bonus. You can contact your property management company to find out.
A rule of thumb is that if the property manager you use is a contracted individual, a bonus would be appreciated for a job well done, but if a property management company employs your property manager, it's typically the company, not you, that would give a holiday bonus.
With mom-and-pop landlords of single-family homes, the decision is all over the board on whether or not to give a bonus to your property manager. Here are some considerations:
Are you pleased with the service you're receiving? If so, give a bonus. If not, don't.
Does your budget allow for this? If so, and if you are pleased, give a bonus. If your budget doesn't allow for this, it's time to find out the reason. Is your property manager charging too much for what they provide? Are your vacancies too high? Are you charging market-rate rent? If your budget doesn't allow for a bonus to the property manager, it might be time to reevaluate this property and its related expenses.
How much should you give?
Landlords of apartment buildings who give a bonus to their property managers tend to do so in an organized fashion, meaning they often include a bonus as a line item expense in their annual budget. These types of bonuses tend to be substantial, such as a month's salary. And talking about substantial: Brick Underground reported in 2011 that a superintendent of a 65-unit loft building in New York City's Financial District received a whopping $50,000 as a "tip." This tip, however, was probably instead of a raise.
Mom-and-pop landlords have greater flexibility regarding what they wish to give. In these cases, the bonus can range on the high end to a week's or even a month's salary, or it could be a gift card or even a homemade gift.
The word tips is said by some to be an acronym (TIPS) that stands for "To Insure Prompt Service." That might be true, but it's probably not, particularly because if it were true, the word would be "teps" instead of "tips" because "ensure," not "insure," would be the correct word to use.
But the point is taken. Some landlords give a tip or bonus to help ensure they get the best from their service providers, and some tip or give a bonus for a job well done and as a means to keep the property manager around.
The Millionacres bottom line
If you're happy with your property managers, by all means, give them a bonus, but if giving a holiday bonus to your property manager rubs you the wrong way because of a job not well done, then it's better not to give one. If you feel this way about your property manager, however, it's probably time to start shopping for a new one.