Renting to Tenants with Pets: Pros and Cons

Chances are, you've been receiving those all-important calls from potential tenants, eagerly inquiring about the pet policy for your property. The recent APPA National Pet Owners Survey revealed that 66% of American households own a pet. Among this furry and feathered majority, a staggering 45% are dogs.

Drawing from my extensive 35+ years in the property management game, I can vouch that most residents I've crossed paths with are proud pet parents. Here's a nugget of wisdom: Properties that extend a warm welcome to pets tend to snap up tenants twice as fast as their pet-restricted counterparts.

Here's the million-dollar query: Are pets a part of your property's inner circle? And if so, what's the scoop on pet-related charges? Don't leave prospective tenants guessing – let's uncover your pet policy together!

Consider this

In renting, landlords and homeowners can grant or deny entry to our furry, feathery, or even scaly friends. But hold on to your leashes! This tale has a twist: service animals, companions, and emotional support animals are the exception to the rule.

As you ponder the great pet policy debate for your rental haven, here's some food for thought:

1. Pets are Prevalent: 66% of households have pets, so you're in good company.
2. Renter's Best Friends: 72% of renters have pets or come with their beloved companions.
3. Pick Your Pack: You get to choose which types of pets are welcome and set the limit.
4. Size Matters: Breed and size specifications? That's your call.
5. In or Out: Decide if you allow outdoor only or both indoor and outdoor.
6. Money Talks: You can charge deposits, monthly fees, and even demand renter's insurance.
7. Pet Perks: Remember that sweet pet rent option.

Vacancy Time

Imagine this scenario: you're the proud owner of an investment property, pondering whether to welcome these furry friends or keep the doors closed warmly. Well, here's a hard-hitting truth: If you opt for a strict "no pets allowed" policy, you're slashing your potential tenant pool in half, doubling your vacancy woes. Why? Because a whopping 72% of renters share their lives with pets, and by turning them away, you're saying goodbye to nearly three-quarters of the rental market. That's a surefire recipe for extended vacancies, and that's no joke.

Let's break it down: The typical property stays on the market for 14-30 days. But if you bar pets, be prepared for a grueling 30-60 days (or more) vacancy. Crunch the numbers, and you're looking at an extra $3,000 in lost income compared to a pet-friendly landlord. Here's the kicker: In our experience at Management One, where we've leased over 10,000 homes, most pet-related damages are a drop in the bucket—typically under $1,000. So, why miss out on this untapped market?

Small Dogs, Big Dogs, Bad Breeds, Good Breeds

As the landlord, you can determine which furry companions will grace your abode. It all begins with the question of breeds. Here's an insightful tip: Many insurance policies often draw the line at so-called "vicious" breeds, making it an intelligent starting point for your pet policy. And guess what? Most property management companies are right on board with these guidelines.

But that's not all. You're also the master of sizing things up. Yep, you get to set the bar for the size of the dogs allowed on your rental turf. It's quite common to slap a weight limit on the pets permitted in your rental property. Consider it this way: A large dog might not be best if your property is cozy or confined. However, if you have a sprawling backyard, you might have room to accommodate that big, bouncy pup. Size matters, and you're the one calling the shots.

How many are too many?

The answer to this puzzle lies in the dimensions of your home and the expanse of your yard. If your home is small, one pet may be the sweet spot, ensuring ample space for both furry friends and humans to coexist harmoniously. But if your home is extensive or you have a large yard, you might just have room in your heart for more four-legged pals.

Regarding the official tally, it's usually a duo of pets—specifically, cats and dogs—that get the green light. The catch? Fish and reptiles often fly under the radar and aren't included in this count. And guess what? Most management companies adhere to the "two pets per property" guideline, ensuring a balance between creature comforts and landlord peace of mind.

Outdoor Only or Indoor/Outdoor

In the early days of advocating for pet-friendly properties, we initially had a strict "no indoor pets" policy. However, we soon discovered that despite our best intentions, 90% of residents couldn't resist bringing their furry friends indoors, rendering our policy somewhat futile.

To tackle this challenge head-on, we made some strategic policy adjustments. This included introducing a monthly pet rent and a slightly higher fee for indoor pets. Hang tight because we'll delve deeper into the details of fees and deposits shortly. These changes helped us embrace the pet-loving community and ensured that our policies aligned more closely with the real-world preferences of our residents.

Deposits and Monthly Fees

It's true that pets can occasionally cause property damage and might pose inconveniences to neighbors. However, let's not overlook the fact that permitting pets in a rental property can open the door to higher rental income for owners, property managers, and landlords.

The real question is how to proceed: Do you opt for a deposit, a monthly fee, or perhaps both? The crucial distinction lies in refundability—deposits can be returned, while fees cannot. It's worth noting that some might label the pet deposit as non-refundable.

Here's where it gets tricky: State laws can throw a wrench into your plans, as they vary widely. It's essential to consult your local Fair Housing office to understand the specific regulations in your area. In some states, landlords cannot charge pet-related fees or deposits. However, in states where it's permissible, you can decide. Typically, the laws might prescribe upper limits on the amounts you can charge, but it's common to see pet fees or deposits ranging between $250 and $500. So, while navigating these waters, ensure you're sailing within the legal bounds of your state.

Pet Deposits

When you collect a refundable pet deposit, it's crucial to know that when your resident moves out, you should refund the deposit if their pet hasn't caused any damage. Conversely, if pet-related damage is evident, you'll need to provide the resident with a detailed list of repair expenses. This transparent breakdown reinforces your decision to retain all or part of the pet deposit for necessary repairs. Clarity is key in ensuring a fair process for you and your tenants.

Pet Rent

Let's dive into the intriguing world of pet-related fees in property management. One such fee, known as "pet rent," has recently gained traction. You'll discover that many property managers, landlords, and apartment communities now incorporate a monthly pet rent, typically within the range of $35 to $100 per pet.

Standard practice dictates that property managers and landlords often add this pet rent to the monthly rent, effectively increasing their monthly revenue. But the question remains: Should you also charge a pet fee or deposit? Here's the scoop: If you choose not to impose a separate pet fee or pet deposit, you can still utilize the security deposit to cover any potential pet-related damages.

You might wonder, "Why bother with pet deposits when security deposits are often more substantial?" Well, the answer lies in the potential magnitude of pet-caused damage. Sometimes, the security deposit alone might not suffice if substantial damage ensues. That's why some property managers and landlords consolidate all fees into one comprehensive security deposit.

The beauty of this is that property managers and landlords have many options to choose from when it comes to handling pet-related matters. You can opt for one or more of the following:

• Regular Rent
• Additional Monthly Pet Rent
• Security Deposit
• One-time Pet Fee
• Pet Security Deposit

It's worth noting that you can't always please everyone. Some residents may grumble about pet-related fees, whether pet rent, a pet deposit, or other associated costs. However, most pet owners are ecstatic to discover a welcoming place that allows them to keep their pets.

Here's the bottom line: Relying solely on a pet deposit may leave you shortchanged if significant damages exceed the deposit amount. Therefore, opting for a comprehensive deposit to cover all potential damages, regardless of the source - what or who caused the damages, is often the wiser choice. In this ever-changing world of pet-related charges, it's crucial to strike a balance that meets the needs of both property owners and residents.

Insurance

Before wrapping up, let's talk about renter's insurance. It's smart to recommend that your tenant get this coverage, and here's why: The costs are budget-friendly, typically running between $10 to $30 per month, and it provides up to $300,000 in coverage. Their renter's insurance can swoop in to handle the expenses if significant damage occurs.

The pro tip: Make sure your name or the property management company is listed as an additional insured party on the policy. This ensures you'll be alerted if there's ever a lapse in coverage. It's like an added shield of protection, offering you peace of mind and an extra layer of security for your property.

Wrapping it up

Embracing pets in your rental property opens the door to a broader pool of prospective residents, making your property more appealing and competitive. Whether you opt for a pet fee, pet rent, pet deposit, or even decide not to impose any additional charges, welcoming pets fosters a positive and welcoming atmosphere.

This attracts pet-loving tenants and initiates the landlord-resident relationship on a friendly and inclusive note, setting it off to a good start.

Here's a quick video guide to the Pros Cons of Pets in Your Rental Property: