The coronavirus pandemic has changed a lot about how we live and work, and the property management industry is not immune to these changes. Due to a spike in pet adoptions following the 2020 stay-at-home order, an increase in pet ownership brings up one of the many important decisions required of a landlord: Whether or not they should have a pet-friendly rental policy.
It can be a tough decision, especially if you are new to property management. There are also big risks associated with being a pet-friendly property. It is common for landlords to immediately reject allowing pets on the property, as pets carry allergens, can be noisy, and might cause damage. On the flip side, properties with a pet-friendly rental policy have an advantage in the competitive rental market; and making room for furry tenants can lead to greater success for landlords overall.
While it is up to every property owner to make their own decision as to whether they want to allow pets or not, it is important to pay attention to the benefits that offering homes to pet-owning renters can have for a landlord. Here’s a look at the top 5 ways a pet-friendly rental policy can make your property more profitable:
#1: Reduced Vacancy Time
Time is money in rental management. The longer a property sits vacant, the less money it makes. When a tenant gives notice, landlords need to secure new tenants as quickly as possible to reduce the amount of time the property sits vacant. This can be hard to do for properties that are not pet friendly.
According to the Humane Society of the United States, more than 72% of renters own a furry friend. The majority of these renters claim to struggle when finding a pet-friendly rental. As a landlord, this is your opportunity to have more tenants interested in your property! By allowing pets at your rental, the number of qualified rental applicants for your property dramatically increases, giving you more options for finding great tenants while simultaneously increasing the desirability of your rental. This leads to shorter vacancy times between tenants, and a reduced loss of rental income.
With more potential applicants, it is even more important to screen your tenants. Beyond a standard background and credit check for your tenants, landlords can do additional screening for pet owners. Pet screening can include requiring applicants to submit references, vet records, obedience training certificates, and proof of renters insurance with pet coverage.
#2: Increased Renewal Rates
Tenant turnover and vacancy can quickly turn a profitable investment into a sinkhole. Pet-friendly policies will not only lower your vacancy rate, but they can also increase your renewals.
Vacancy rates decreased significantly in 2020, given the eviction moratoriums nationwide, creating a highly competitive market for renters looking to move. Add to the fact the scarcity of pet-friendly rentals and you have a property that your pet-owning tenant won’t want to let go of.
#3: More Money from Fees
In areas where vacancy rates are low and availability of pet-friendly rentals is even lower, most tenants expect to pay extra to live with their furry roommates. If your state allows it, you have the option to charge an additional pet deposit on top of a standard security deposit from your pet-owning renters, as well as monthly pet rent.
A Pet Deposit is a refundable fee paid by the tenant when they move in. It is used to cover the cost of pet damage or excessive cleaning. If there is no pet damage or cleaning needed at the end of the lease, then the pet deposit is returned to the tenant just like a normal security deposit. Be sure to keep it the pet deposit in a separate account if your state law requires it.
If you only collect a standard security deposit and a pet causes more damage than the deposit will cover, you must invoice the tenant to cover the cost of cleaning (or repairs) beyond the security deposit. You will then be actively seeking payment from a renter who has moved, and they—or the money—might be hard to track down.
Pet Rent or Pet Fees are paid monthly by the tenant when you accept pets at your property. Pet rent/fees are different from pet deposits, Pet rent/fees are non-refundable and become income off your investment.
#4: Protected Property
Establishing a pet policy at the start of a lease agreement provides you and your rental property with certain assurances, including:
- Fewer occurrences of unauthorized pets.
- Protections against pet damage in the way of a pet deposit, liability coverage through renter’s insurance, and established rules and expectations regarding pet behavior.
- Additionally, when you collect a significant pet deposit from your tenants, they will be more likely to prevent pet damage because they have money on the line. If you simply collect a non-refundable pet fee, your tenants have no monetary incentive to prevent pet damage.
#5: Improved Reputation
Pet-friendly properties gain the support of their community by creating pet policies that save animals’ lives.
Problems finding and keeping rental housing leads to the surrender of half a million pets to shelters each year, many of whom aren’t lucky enough to find new homes. This is due to the fact that even “pet-friendly” rental housing usually includes weight limits (e.g. no dogs over 25 lbs.) and breed restrictions, effectively excluding most of the nation’s pets. Rather than limit the breed or weight of a pet, it is often more effective to ask questions and meet the pet to determine if its temperament is a good fit. Going solely based on breed is often not accurate for every pet. There are many friendly dogs that are often discriminated against based on breed.
Rental housing that welcomes all cats and dogs, regardless of breed or size, will save hundreds of thousands of lives and ensure that no family ever has to choose between their pet and their home.
What about service, emotional support, and therapy animals?
Tenants who have service animals or emotional-support animals (ESAs) are protected by the American Disabilities Act (ADA). As a housing provider, you’re required to make reasonable accommodation for these renters and their animals. Subsequently, renters with a service animal or an emotional-support animal are exempt from paying an additional pet deposit, pet fee, or monthly pet rent. They will, however, need to provide proper documentation regarding the need for such an animal, as required by the ADA and Fair Housing Laws.
The legality of pet-friendly properties…
Make sure to check your state and local laws about increasing deposits and the legality of non-refundable fees. Your lease should have clear language about the types of pets acceptable at the property and what additional rent, fees, or deposits are associated with a pet-friendly rental. (Just remember to get it checked out by a trusted attorney before anyone signs on the dotted line.)