Should I charge pet fee again with lease renewal?

Question

Hello everyone,

Hope you are having a productive day! Just have a quick question about lease renewals.

The lease on my first rental property is coming to an end and my tenants already decided that they wanted to stay another year. Yay! With that being said, I have increased the rent $45/month. I have decided that I will not collect the difference with the security deposit but I will collect the difference with the last month's rent that I originally collected.

Now I'm wondering if I should charge them the full non-refundable pet fee again for the second year? Or should I just keep the original one I collected when they moved in?

I searched the forums but could not find any opinions on this.

What is your take on this matter? I'm curious to know!

Lynn McGeein · Answer

Being someone who had to pay pet fees and pet rent when I rented recently, I feel differently about this issue.  For our rentals, we charge an additional security deposit (under what is max by my state rules, of course, so on a $950 monthly rental, for instance, it would normally be $1000 deposit without pet, $1500 deposit with a pet), but it is totally refundable if there is no damage.  Responsible pet owners greatly appreciate knowing they can get their whole deposit back if the home is kept well, and I like to screen the pet to make sure it is well-trained.  If I couldn't charge more than 1 month for security deposit (some states will not let you) then I would have to change that policy, but I'd much rather incentivize the tenant to take great care of the unit to get all their money back than have them think, Well, I'm being charged x amount more for this pet, so might as well get my money's worth.  While my dog didn't do any physical damage when we rented (he would never), I definitely bathed him in the nice warm shower at least twice a month rather than paying for an outside dog wash or an outdoor hose, and I had no problem playing fetch with him up and down the carpeted hallway rather than getting on my rain coat and taking him outside for play time in the rain.  I still didn't do enough harm to cover the pet fees, but I really wanted to.   That's not a mind-set I want my tenants to have.

Al Williamson · Answer

Fees are a nice source of additional income but there is a fine line. Watch the irritant factor.

Ryan Dossey · Answer

the point of that fee should be to cover the cost of damage the pet could potentially cause. Charging that twice seems a bit greedy and could bite you with the tenant.

Nicole Grenier · Answer

This is why I love Bigger Pockets. I am in this exact position right now and this was so helpful!

Daniel Miller · Answer

My thought on this (as a landlord of one house, still on my first tenants), is that I don't entirely see the purpose of a separate "pet deposit" on top of a regular deposit.  If I only required the normal deposit, and they left pet damage to the house when they moved out, I would repair that damage using the standard deposit, regardless of whether part of it was labeled "pets" or not... is this thought flawed??

Brad M. · Answer

That is a good point @Lynn M.

I have collected a non-refundable pet fee and pet rent. I prefer the additional pet rent approach ($25/month per pet) only because it keeps adding up if they stay more than one year. With a non-refundable deposit, it seems awkward to ask for another deposit at renewal time.

To Lynn's point, I can definitely see how a tenant could take the mindset that they have "pre-paid" for the right to cause pet damage.

Lynn McGeein · Answer

No, I charge no pet rent or non-refundable pet fees, just more in refundable security deposit in case of damage.  I do, however, personally screen the pet.  In the state where I use property management and cannot screen them myself, I've had issues with management not screening well, so after a lot of good ideas on forum posts here, I now require vet records to prove breed (to insure breed restrictions are met) and current shots, a K9 Good Citizen certificate (if they don't have one, the manager refers them to local testing), renter's insurance with minimum $100,000 liability and me listed as additional insured, proof of required city pet license, and the larger refundable security deposit.   It may sound like a lot, but it's all fairly easy to provide if you actually are a responsible pet owner.  This just seems to me to be a more positive approach that enforces that I want only well-trained pets with responsible parents, with a bonus that they'll get their whole deposit back if they actually are.

Tomas Calvino · Answer

I understand where you are coming from with that. Now would you still charge an additional pet rent monthly since you are giving them the opportunity to get their pet deposit back?

Tyson Luthy · Answer

I wouldn't charge in the case of a renewal. Like some people have already commented, it is a really good idea to charge a "pet rent" or "pet inspection service" fee or related charge.

Good clean people who have good clean pets are willing to pay for them, and even if it's just an extra $25/mo, over the course of a year that adds up to be about the same as a pet deposit.

John A. · Answer

@Tomas Calvino,  I was in the exact same situation about a year ago.  When the tenant renewed the lease, I told him I included the pet fee in the monthly rent (increased $50) so he wouldn't have to pay another large sum at renewal.  He seemed to appreciate it.  I don't think I'll use a one-time pet fee with any future tenants.  For me, the monthly rent increase is the way to go.

John

Should I charge pet fee again with lease renewal?

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