If you ask most people with a pet how they feel about them, they’ll quickly answer that it’s part of the family. People LOVE their critters, which can be a sticky point for landlords. As someone looking to engage in a business relationship with tenants, you have a lot of questions to ask yourself about pets. Should you allow pets on the property? If so, should you charge a pet fee or pet rent? What else can you do to minimize the long term damage?
Let’s start by talking about the most important issue- whether or not you should even consider allowing pets.
Pets- Yay or Nay?
In 2014, Apartments.com conducted a survey showing that 72 percent of renters have pets! That’s nothing to scoff at, because when you’re looking for someone to rent out your property, having a no-pets policy means you’re effectively only opening your door to 28 percent of the market. That alone should be enough reason for you to figure out how to make a pet-friendly policy work.
Something else to consider is higher income. This white paper has some good information on the subject, and indicated that the average landlord renting to tenants with pets receives $222 more per month for each unit. So even if that pet causes an extra $2,000 in damages each year, those landlords are still coming out ahead.
The same paper references that tenants with pets tend to stay longer than those without pets. This reduces your property’s vacant time, which is critical for regular cash flow. This makes sense, as people with a family (including pets) tend to be more “settled down” than those without any kind of family.
So why wouldn’t you rent out to tenants with pets?
- Pet fees are illegal in some states
- Pets can cause major damage to a property
- The risk of the pets bothering the neighbors (barking, claws on hardwood/tiles, etc.)
- Pet dander will get into the carpet and air ducts
- Additional maintenance costs, such as having to pay maintenance personnel to pick up droppings on the property (since many owners won’t clean up after their pets)
All of these are important, but there are things you can do to mitigate these issues. Here are a few of the best.
Pet Fees vs. Higher Rent
As mentioned earlier, landlords renting out to tenants with pets can usually charge more. This is good news, because charging a higher rent is usually the best route to take in this situation.
The problem with pet fees or pet rent is the tenant’s perspective. They see this as an extra expense, thinking you’re just trying to nickel and dime them for every penny they’ve got. They’re thinking is that since they’re already renting the space, why do they need to pay extra for their pet to occupy some of that space?
But if you come to them with a higher rent, the fee is essentially included in the rent. They won’t see it as an extra surcharge, and they’re more likely to be fine with it.
This also works great for states where pet fees aren’t legal.
NOTE: If you do decide to still charge an additional pet fee, you have two main options- a pet deposit or pet rent. A deposit is one they pay upfront, while the rent is paid each month on top of the regular rent. You can choose to just do one option or a combination of both. Most apartments will charge a few hundred dollars for a deposit, whereas pet rent can be anywhere from $10 – $100 a month.
Afraid of Lots of Damage? Raise that Security Deposit
While it’s true that requiring a larger security deposit may cause some reluctance from potential tenants, there are several advantages for both parties.
For the landlord, a larger deposit means the tenant has more “skin in the game.” Knowing they can get most of that back if they (or their pets) don’t cause major damage will give them more incentive to take care of the place. Everyone hates losing money, and every time Fido causes damage to the property, they’ll know they just lost money.
You also benefit because “a bird in the hand is worth two in the bush.” In other words, it’s much easier to get the money upfront to pay for damages than request it later. A lot of tenants will drag their feet on reimbursing you for damages they caused.
The tenant benefits because as long as they take care of the place, they’ll get a windfall of cash when they move out. They also don’t have to pay those dreaded pet fees or pet rent that have negative connotations.
One side note- a great policy is to make it a requirement that when a tenant and their pet moves out, the carpets and air ducts are cleaned. They can pay for this out of pocket or it can come out of their security deposit.
Don’t Judge a Book by its Cover
Lots of apartment complexes and property management companies don’t even consider pets over a certain weight (such as 25 lbs) or certain dog breeds. The idea is that larger animals tend to cause more damage than smaller ones (which is generally true), and that aggressive dog breeds add more liability than is necessary (which isn’t 100% accurate.)
While having a weight limit policy is good, you should re-think a strict policy on certain breeds of dogs. “Aggressive” breeds usually have a bad reputation because of the people that own them, not because of the dog’s nature.
You can have a perfectly-manned, well-behaved pit bull that loves every person he meets. Likewise, you can have a golden retriever that bites anyone who gets too close to its owner. Even though there is a list of “the most dangerous breeds” based on statistics, this article by Steve Dale explains why these lists don’t really make sense.
And don’t forget that the dogs that usually annoy neighbors aren’t the big, confident ones. It’s the tiny, yippy dogs that bark anytime they hear something.
So how do you decide whether or not to allow the pet? The best way is to meet it, but you can also get a feel for its personality by asking the owner a few questions about it.
Wrapping it Up- Should I Rent to Tenants with Pets?
If you choose to deny tenants the ability to have a pet, you’re closing yourself off to a huge market. Not to mention that you can actually make more money from tenants with furry friends! The question is how you should handle the additional risks that come with these kinds of renters.
Whichever route to decide to go, try to keep it simple. Make sure the terms and conditions regarding pets is clear and fair to both parties.