Pets for more rent or no pets for less?

[Daniel J Jackson]

Hello all:

I just finished rehabbing one side of a duplex and have two great tenant candidates.

OPTION A: Will pay $1,250 and has no pets.  2 adults and 2 young kids.  Great all around.

OPTION B: Will pay $1,250 + $75/mo for the two pets (a gray house cat and a lab/retriever mix). 2 adults and 3 kids (one 2 week old baby).

Which would you choose?

I like the idea of additional income of $900/year, but of course worried the pets will cost me more than that?  I will also have a deposit on hand of $1,250 (one month), so that can also protect me against pet damage on move out.

I am inclined to go with the people with pets, but I just finished this remodel and it looks nice, so I might be having an emotional reaction to animals messing it up?

Floors are vinyl plank laminate throughout.  Baseboards were cheap and easy to replace. What else should I be worried about?  How hard is cat smell to eliminate?

Thanks.  Open to any feedback.

Daniel

[Matthew King]

I was in a similar position about two years ago and ended up going with the pet owners after talking with them for awhile and realizing they were clean and well taken care of people.  That's not always the case though and for my area the rent they were paying pretty much eliminated any low hanging fruit. 

I'm sure given the choice again I'd be hesitant again though just because the potential is there for animals to ruin things.

[Account Closed]

I think it’s a toss up. How many bedrooms is your duplex?  

You are throwing in not only animals but an extra child.  So you will have more wear and tear on things with the option B.  I’ll take steady over 900 dollars more but more risk. 

FYI for me cats are the worst for damage. 

[Kelly N.]

I'd look at who plans to stay longer, or who is more qualified.

We allow pets (up to two cats or one dog at select apartments), but instead of charging extra rent, we increase the security deposit to 1.5x monthly rent (instead of 1x rent).   I feel that if you charge pet rent, or a nonrefundable pet deposit, that SOME people are then under the impression that this extra money will cover any damages done by the pet, and MAYBE they don't need to be sure the pet doesn't cause these damages since they aren't getting that money back anyways.  Just food for thought...

[Daniel J Jackson]

All great thoughts. Thank you.

@Account Closed I really appreciate that thought.  I need to confirm with them, when we sign the lease, that their deposit is still up for grabs when it comes to repairs needed due to animals (ie. that the pet rent does NOT cover that).

The candidates with the pets say they want to stay 3 years.  The others are a toss up, but I would predict 1-2 years since they are in a better position to buy in the near future.

[Thomas S.]

Hands down without a doubt option #1.

Never rent to cat owners, they will pee all over the place (the cats not the tenants) and cause extreme damage. Fewer people also likely means less ware and tear however you will need to determine what type of parents they are when you do their personal interview. When you allow families you need to determine how they control their children. I would strongly advise doing a surprise drop in at their present home and see if they will invite you in. What you see will determine your decision on option #1.

Dogs and cats both do damage, you can not avoid that so if your allowing pets get use to the idea.

[Nathan Gesner]

@Daniel J Jackson your math doesn't work for an increased deposit. If @Kelly N. charges 1.5x the rent for a deposit, that's less than $75 a month rent and it's fully refundable whereas you get to keep the rent. 

I don't charge "pet rent" because then it's tied to the pet. Just increase the rent. That way you continue earning the higher rate even if the pet disappears.

If the animal causes damage, you can still charge the full amount to their deposit and/or go after them for collections. The increased rent is not to cover damages and you should never sell it that way. It's for the privilege of having pets in the home.

The deposit is treated like any other deposit and either applied to unpaid charges/cleaning/repairs or refunded to the tenant.

Cat urine is difficult to get rid of, sometimes impossible. If a cat urinates on carpet, it can soak through and get into the subfloor and may not come out. Many Landlords will accept dogs but not cats for this reason. In my personal experience, cats cause more "damage" to rentals than dogs do.

[Matt M.]

@Daniel J Jackson

Take the no pets option. Everyone claims they are responsible pet owners..and they all lie.

[Account Closed]

Originally posted by :

All great thoughts. Thank you.

The duplex is 3/2.  Not really worried about the extra damage the baby might cause.  Do you mind elaborating on "cats are the worst for damage"?

Nathan and Thomas summed it up.  I would rather a unit sit empty for an extra month then have a cat in my property. 

[Anthony Wick]

I would say the no pets option. But, there is an underlying question. Which tenant is truly more qualified? No two applicants are equally qualified. If you feel the need, post their qualifications; Time on job, Income, Credit Score, Debt to income ratio, Rental History, Overall feel for when you met them, expectation of how long they might rent, etc. They are not equal applicants. Impossible. BTW: the highest income earners are not what I necessarily look at. Those people might be saving money to buy a house. I like the ones that can pay the rent without being broke, but also cannot save enough money to leave my unit. 

[Quito Keutla]

@Daniel J Jackson if rental demand is high I would go with no pets, however by not accepting pets you reduce your pool of the tenant population by 50%. It sounds like your not low on qualified applicants. Happy Investing!

[Amy Beth]

@Daniel J Jackson I would take the pet owners if all else is equal with their housing history and credit. But I would add the caveat that they have to show proof that each pet is spayed or neutered and that they have renter’s insurance to cover their pets. This decreases the chances of pets whom pee inside and it lowers some of our liability. It also shows that they are responsible pet owners. This is our rule with our tenants and we require written documentation before they sign the lease.

[Mark S.]

No pets. As others have stated, too much potential for additional damage. Plus the potential for complaints from neighbors about a barking dog!

[Jaron Walling]

What's the condition of either tenant(s) vehicle? Is the interior clean or messy? Is the body work damaged? That's a great sign of how well they take care of stuff. It's smart to assume they would do the same in your property. 

I'm leaning towards the non pet tenant but it's just my opinion. 

[Michael Robbins]

I like charging pet rent.  It is often an overlooked source of revenue in investment properties.  Just keep in mind if you encounter a service animal that pet rent, pet deposit, and breed restrictions are prohibited.  

[Justin Howe]

@Daniel J Jackson if you have pet friendly material in the house I would say absolutely. In Hawaii I found this to be a kinda niche market as most owners would rather not rent to pet owners. Check out the competition and see what other landlords are doing. Finally, if you decide to rent to pet owners you absolutely have to check on the condition of the property to ensure the owners are responsible. Good luck.

[Jonathan W.]

@Daniel J Jackson

I mean pets just mean extra work for extra money. I’d be very happy to take pets. Some cats can develop problems and pee in the wrong place but usually older sick cats. If it’s a kitten you may be in luck. They’ll just scratch the carpet. Anyways that’s why you have a deposit

Get the one that is more qualified or looks neater or honestly are better parents

It’s the kids I’d worry about!! The animals do damage but it all comes down to how responsible the parents are!!! I own pets. I have a cat and a dog and they require work and attention!

someone left a jar of coconut oil unopen and it fell on the carpet which sucks!!! Cats love surfaces and they will drop things so if your tenants are messy that cat can do damage just walking around

If they seem like life long Tenants either of em the place is going to take a beating regardless Kids?!!!

I mean I hope everything in here is cheap just cause I foresee damage regardless

now if it is nice place which you don’t seem to say it is but if it is then definitely no pets for that property.

I might’ve just rambled but do you want the extra work for the extra money? Get the one with the pets!!!

Good pet owners will pay for their pets!!! 75 a month is a good or higher rate imo so nice job on that.

Now just pray your not sanding pee stains out of the floor boards when they leave!!!

Oh wait that’s why there Is deposit

[Royce Talbo]

@Daniel J Jackson I would choose option A only because option B has a cat and an extra baby.  If it were 2 dogs and same number of kids I would go with option B.  something you forgot besides flooring and baseboards, cats like to play under doors and claw at them as well as going in and out of cabinets.  They do a lot of damage with their claws as well as the pee smell.  Kelly mentioned to increase security deposit 1.5x, check that you can do that. Not all states allow you to do this, you can only hold a deposit has much as monthly rent.  If you want to charge extra for rent that would be a better route, as you net more money incase of damages.  Good luck!

[Daniel J Jackson]

Thanks all for these very helpful comments.

Here is the update: the place is a duplex and we finished remodeling one side thus far.  We chose the tenants with no pets!  They dropped off deposit same day and they are chuffed.

The other candidates were also really wonderful (granted, not as strong as the first people but still leaps and bounds better than third place candidates), so we offered the other side of the duplex to them.  We will be remodeling that next, and will keep in mind that there are pets as we do so.  They will move in about 3 months from now.  This option allows us both to stop searching.

So, long story short, looks like we didn't have to chose after all since we will be getting both tenants!

I hear all the concerns about the cat.  I am going to make sure both animals are spayed and neutered and have up to date vaccinations.  We do require rental insurance of $300,000.  I will also make clear that their deposit would go towards any damage caused by the animals.

Vinyl plank laminate is great if there is damage as quite easy to replace sections.  The cabinet scratches are more of a concern.  I will need to monitor and maybe put some version of a scratch-guard?  The pee smell is biggest concern.  Need to monitor that closely.  I don't think I can really mandate where they put the cat litter (but I hope it will be either outside or close to back door).  Maybe I can offer to install a "doggie door" in the back?

Thanks all!

[Loren Clive]

As an aside, doesn't renter's insurance only cover losses to their personal property, not pet damage to your property (the house)? I asked my insurance agent this and that's what he said although I've had tenants argue me on it. No one has yet produced anything written to the contrary.

just curious what everyone's experience is on that. Congratulations op on your new tenants!

[Amy Beth]

@Loren Clive to the best of my knowledge the renters insurance does not cover damage to a property by a pet. The reason we require it is because t does cover any animal bites so if a tenants cat or dog bites someone it provides liability coverage. It also covers the tenants belongings in the event of water damage, Fire, etc so the tenant has someone other than the landlord to go to have their items replaced if something goes wrong.

[Loren Clive]

@amy beth thanks for clarifying. Good idea!