Allow Pets or Risk Vacancy?

Question

Looking for some general advice:

We have some tenants who are really great - military couple, clean, quiet, pay rent on time, etc. They are wanting to break their lease 5 months early because they have a dog who is currently bouncing around New Jersey from home to home and they want to bring him up here (Alaska). I have already explained that breaking their lease would result in the forfeit of their security deposit. They offered to bring us tenants to replace them, I explained that they would have to pay an application fee and pass our background check before we agreed to let them take over.

My question is, if we allow them to have their dog they have expressed interest in staying put until Sept of 2020. Is it worth going through the advertising/tenant swap out just to avoid our otherwise ideal tenants having a dog? We were planning on raising rents from $1200 to $1350 when their lease expired June 1. If we charged $50/mo pet rent on top of the base rent increase, is that worth having the security of two years of reliable rents at slightly above market rates? Should I get them to sign a 2 year lease when we finalize this conversation to ensure that will be the case?

Mark Ainley · Answer

@Jeremy Bartlett I am big on allowing pets and simply covering your risk especially with over 50% of tenants having pets or wanting to leave open the option of having pets these days.  Ask yourself "What is the worse case scenario here(based on your current experience you have with these tenants)."   You may have to replace flooring, some chewed trim, landscape cleanup and maybe some other wall or scratching issues.  Make sure that amount is covered by additional pet rent, pet deposit, or general deposit(how ever you structure it).  I would think in this case there would be way more risk in an unknown new relationship with a new tenant without pets then allowing your existing qualified tenant to add a pet.

For our firm historically over the last 15 years highly qualified tenants have caused very little pet damage.  The horror stories you hear about pets usually surround many red flags in the application process with the actual tenant that were glazed over or risk accepted and their animals were never accounted for in the decision.  Our more then approved tenants with animals are never an issue for us.

Keep in mind the tenants don't want to move so they may be willing to put up more deposit to not have to deal with moving and explain to them the breakdown of why you are asking for this amount.

Jeremy Bartlett · Answer

@Erik Anderson you are correct. This is a mil to mil couple, Army/Air Force. He is getting out this year, and her commitment is up Sept of 2020 - this is their last assignment and they are riding out their time until they separate and move. Their dog I guess is just bouncing around houses in New Jersey right now and they are looking to give him some stability.

@Mary Mitchell thats a good point, I appreciate it. At a minimum I have them on the hook until June 1 because they would be breaking the lease for no valid reason. A 15% hike is not normal, but we recently finished renovations in the unit and we inherited the tenants, so we are riding out the lease until we can bring it up to the rents we are planing to charge for their unit.

@Kenneth Garrett I allow pets in our single family as well. This is a 4plex that we are house hacking. We don't allow pets for the tenants but we ourselves have a dog and 2 cats living with us. I was thinking that we could charge them $200 refundable pet deposit to bring them up to a $1400 deposit, and then charge $1350 for the rent +$50/mo pet rent thereafter to match the deposit.

@Mark Ainley I appreciate the backage from your firm's experience. They are good tenants, just military in a tight spot for their dog, which I can appreciate.

I appreciate the feedback everyone!

Patrick M. · Answer

This has 0 to do with a dog.

This is about allowing a tenant to manipulate you.

Kenneth Garrett · Answer

I allow pets in my single families and duplexes.  So many pet owners it would be difficult to rent them without allowing pets.

I charge a $250 non refundable pet fee plus $35 each month for each pet.

Check with your insurance carrier some dogs are prohibited.  Pit bulls, etc you know the drill.  I agree with @Mark Ainley most damage is minimal.

Extra income is always nice and keeps you competitive.

Good Luck!

Mary M. · Answer

your stated increase  is 15% - is that a normal increase for your area?

Mary M. · Answer

first, I would check your state laws about what happen if a tenant breaks a lease. In my state I can only charge them at most two months of rent and I have to be actively trying to replace them.  I for sure could NOT keep their deposit for breaking a lease.

As for pets - honestly most people have pets. I would allow them as long as they pay a refunadable deposit of X (i use $500) and that they sign a pet agreement.

to me it seems odd to lose a great tenant for not wanting pets......

Cory O'Dell · Answer

Good tenants, potential for extra income. Like Erik said, I wouldn't put too much weight on the length, but the military also doesn't deem it worthwhile to move someone every 6 months either. If they're good tenants that's worth it alone versus going through another application and hoping your new tenant is good as well. Add it to the lease pocket some extra income and call it a day.

Allow Pets or Risk Vacancy?

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