Who should receive the renewal bonuses?

This is a never ending question for many professionals in our industry. In my personal opinion I feel that the renewal bonuses should be split among the entire team as it takes the entire team to get a resident to renew. Why should the renewal just go to the leasing agent? Why can't it be split between the leasing agent and the maintenance staff? We all know the #1 reason residents do not renew is because of maintenance issues. So if we are pushing our maintenance team to be the best and give great customer service shouldn't we also give them some type of bonus? If we really wanted to be honest with our selves the renewal bonus should go to maintenance as they are the ones who are keeping us glued togeather. Where I used to live I saw more of the maintenance team then I did the office teams. I did not renew because the leasing agent was really nice to me when I moved in I renewed because of the maintenance team. I would love to hear everyone else's thoughts on this.

I think that the renewal bonuses should be put in a collective pot and paid out quarterly, divided equally among the entire team. Let's say the pot has $2500 in it at the end of the quarter, and you have a team of 5. Each person gets $500.


Since it appears that you may also have a leasing bonus for new residents that you pay out to the leasing team members; I advocate establishing a separate maintenance bonus, but this should be done differently. It should reward long term safety (# of days without a lost time accident), percentage of work orders complete within 24 hours, and it should also reward for turns completed within budget and under schedule. What I mean by schedule is you establish a 3-5 day maximum acceptable turn time and pay $50 for each day under the max time the turn is completed. If you have a seriously problematic unit; exempt it from the timetable. These funds should be paid quarterly and divided among the entire maintenance team equally.

THIS! This issue has been a thorn in my side for a while now. I too believe we should share renewal commissions, but my assistant made a good point in her argument of keeping hers. We are a Tax Credit community with 20% market rates mixed in. Because of this we have to complete a full recert on every household. If she doesn't get the recert paperwork completed then they can't renew. Add in we are a 62+ community where most of our residents have no clue what assets they have let alone how to verify them she spends the vast majority of her time doing it for them. She has to sit down with them to order the social security letters, which can take anywhere from 10-45 minutes. Add in begging banks and other income sources to return the paperwork in a timely manner and I have to agree she deserves it.

I agree with Stephani; but will say that often tax credit properties do not have any funds available to pay bonuses... My last property couldn't even afford to give ME a pay increase I deserved after more than a year of progress on all the problems I inherited, I have talked about these before, but they included:

1) Vacancy, I went from 78% to 98% occupied in 9 months.
2) Delinquency, I went from $13k+ to less than $1k.
3) Pest control: I oversaw the completion of a property wide bed bug treatment.
4) Unpaid payables (about $100k); I was not only able to make sure that all vendors got paid their past due bills paid, I was also able to renegotiate new relationships that saved 5 figures collectively; some of these new relationships included better services than were offered in the past. Since the amount was so large, I had the owner's assistance with an influx of funds.
5) I had to turn more than 30 units, and completed more than 40 move ins. I had a spike in vacancy due to the fact that I had to peel the onion and weed people out for various reasons. I also had residents leave for reasons beyond my control; but most of my residents that left were the sources of problems. One of these problem residents would often come to me to tell me about a problem that I already knew about and was working on a solution, but I had to stop what I was doing to tell her I was working on it.


Were these problems created overnight? No. Did I solve these issues alone? No, but I put a lot of time into these issues.

I really like the idea of paying them out quarterly! I remember back on-site that the per renewal amount was much smaller than the amount per new lease, because the renewals were split among the entire team. The problem was that the perception was then that new leases were more valuable than the renewals, even though it is exactly the opposite. So doing it quarterly would ensure a nice big check that would send a better message about the importance of renewals.

Why don't you pay renewals the same as new leases? A renewal is just as valuable and arguably requires more effort from the leasing staff to get it signed. It doesn't make sense to me for leasing consultants to be paid LESS than they would for a new lease. Otherwise, what's their motivation to focus on closing renewals? If you had to choose between helping a prospect find a new apartment (which = a larger bonus than current resident renewals), why would anyone ignore the potential new move-in or put off follow-up to focus on calling back renewals? Obviously, they should do it because it's the right thing to do, but WIIFM?

Okay - I will brace myself for the hate mail. I don't believe in giving new lease commissions or renewal bonuses. I believe in setting up a quarterly bonus system for all employees based on property goal achievement. This includes occupancy goals, meeting financial goals and completing all maintenance goals. In order to achieve and meet these goals all team members must work together, plus all team members must actively engage in the process. In this way, team members who do not work together well can be evaluated accordingly.

Mindy - Not that you need my approval, but I'm actually okay with that approach.

My main thing is that you're missing the point if you're not rewarding lease renewals and new leases the same way. Some states don't permit unlicensed agents from receiving direct compensation for real estate transactions, so the whole per lease/per renewal bonus issue is a moot point. In those circumstances, your method works much better and appropriately balances sales incentives with licensing laws.

I agree 100% with Mindy. I have asked our company to reward based on NOI increase over LY, however because our communities for the most part are 3rd party managed they can't get all the owners on board. I truly beleive this would be a far better program than the current lease/renewal system. I always wondered who came up with the leasing commission in the first place. We are paying our leasing consultants extra to do what their job discription already requires. The true measure of a communities success is an increase in NOI.

I agree that the renewals should be split. When I started in the Industry, the renewals were paid out to the Manager. I immediately started dividing it equally among the staff and although other managers in my company did not appreciate it, the staff loved it. It increased moral and loyalty and now I implement it at every property I manage. A resident renews for every aspect of what the entire team does, from keeping the grounds clean to writing a service request for them and following up with a phone call.

I worked the same way as Mindy in my days. It promoted team concept! So, no one was mad and when something was not going right they looked at it as a team and worked problems out as a team.

Now, there was one person that was not a producer and tried ghosting out of jobs, that person was limited, no bonus, and finally no job. For those wondering, yes there was a paper trail outlining what was wrong, how to improve, and there were follow-ups every 30 days for progress. Ninety days no improvement, so we released them. Yes, went to court and won! Not bragging as I liked the guy on a personal level, but not professionally. The team had not problems and worked even harder because they seen everything was fair and everyone was treated equally.

So, that deal is why I support Mindy's way as well!