Topic: Leasing Bonus Structure

I am a Property Manager at a 164 unit complex in Ohio. I currently have one leasing agent and am looking to bring on another. Both will work between 30 and 40 hours per week. I am looking to restructure my bonus system prior to bringing on additional help for two reasons. One being that my current leasing agent is very lenient with applicant approvals. She wants to approve anyone and everyone and will skirt the rules to do so. I have repeatedly explained the requirements but have to spend additional time reviewing every aspect of every applicant to verify the information she has presented is 100% accurate. The other being with a second leasing agent I feel we may have some backlash with commission splits since my current agent is used to every lease being hers.

My current leasing agent is very money driven but has a hard time seeing the bigger picture. I have recently added rental collections to her list of job duties. I assumed if she was fully responsible for collecting rent from these tenants she would see why we do not want to rent to someone who is under qualified. However it seems the initial move in bonus is more important to her as there is no consequence to her if they don't pay.

My idea is to remove all move in bonuses and renewal bonuses and strictly pay out a bonus based on occupancy percentages as well as a bonus based on outstanding debt by a certain date of the month. (keep in mind my current leasing agent also lives on site and receives a hefty rental discount which I would keep in place)

I am looking for input on this type of bonus structure. I am interested to know if this works well for others as well as if this would be a percentage bonus or a set amount (ie: 98% occupied = x amount or x percent). I feel it would motivate the staff to focus on the bottom line rather than the quick pay out of an initial move in.

Any input and thoughts would be helpful! Thanks!

If she's moving in unqualifieds just to get the bonus... don't pay the bonus, or take back the bonus, if they are evicted due to non-payment in the first three months of their lease. Or similarly, set the standard that the bonus can only be paid once per unit per calendar year (less, if you short-term leases, but you get the idea).

A bonus paid on occupancy AND delinquency benchmarks also works well, as opposed to more of a commission-based structure. Tying in delinquency will help motivate her to property qualify applications. If you stick with what you have, you may want to consider personally reviewing/approving applications prior to move-in. Quite frankly, I wouldn't put up with a leasing agent who didn't follow policy.

Your leasing team should not be approving at their discretion. With fair housing laws, you can't chance being in violation. We offer leasing bonuses for new leases and renewals. Renewals are a higher rate, it is a set amount for certain terms, longer leases are paid out higher. Though, we will be looking at this again because we are using a revenue management system at some sites and it will offer better rates for lower termed leases based off of lease expiration limits sometimes. You could incentive higher for renewals, the more qualified tenants you have the longer they will stay (no evictions, skips, non-renewals).
We also offer qtrly bonuses that are calculated based off of a few different benchmarks: % Qtrly online training completed by the staff, Revenue increase, expenses to budget. The property must be 90% occupied to be considered to receive.
We do not give a bonus based on strictly occupancy %, increasing rents is part of increasing revenue(see note above) and we are okay with a slightly lower occupancy to be able to collect more in rental income.

Sounds to me like you need a new leasing team!

I agree with the previous commenter. Ultimately you are the sole individual that is to approve the move-ins. If these renters are unable to provide the funds after the fact than your initial screening criteria needs revamping. A leasing person is solely responsible for providing the lease. As a sales person myself I find money an extremely high motivator and would be discouraged in the new bonus structure. Just my two cents.