Why you SHOULD allow animals

[Nathan Gesner]

This is probably the best study I've found on the benefits of renting to pet owners. Too many Landlords believe pets cause too many problems and result in a loss of revenue. This study found the opposite to be true. Based on my personal experience with approximately 10,000 leases, I can verify animals are a money-making machine, not a detriment to your business.

Pet-Friendly Housing Study

I hope you actually take 10 minutes to read the article because it has some great information. For those that can't find the time, here are some key findings:

• Approximately 50% of housing studied was pet-friendly to some degree. Only 9% allowed animals without restriction, half allowed cats, and 11% allowed large dogs.
• 82% of renters reported problems finding housing that would accept their pet.
• Pet-friendly rentals earned about 20% more in rent.
• Annual net benefit to the Landlord was $2,949.
• Tenants with animals stayed 3x longer.
• Vacancy was shorter and marketing costs were lower for pet-friendly rentals.
• The average damage reported by each Landlord was $430
• Pet owners did not cause more damage than Tenants without pets, whereas Tenants with children averaged $150 more in damages
• 20% of the tenants surveyed admitted to keeping an animal illegally
• Proper screening significantly reduced the risk. Only 3.7% of the Landlords required pet references, only 7.4% required a pet resume, 11% required health records, and only 18.5% required Tenants sign a pet agreement.

The bottom line: renters with animals are no more dangerous to your property (on average) than renters without animals. The increase in damages is negligible and the financial benefits are absolutely staggering. 

The best thing you can do as a Landlord is:

• educate yourself on how to screen animals properly
• develop rules and be prepared to enforce them
• charge reasonable fee for the benefit of allowing animals.

You'll rent places quicker and easier, you'll make more money, and your tenants will stay longer.

Landlords, join the conversation:

• Does your personal experience match the findings?
• How do you screen animals?
• Do you charge for animals? Deposit, fees, or rent? Or all three?
• Do pet owners leave more damage or cause more problems than people without pets?
• Do pet owners stay longer?
• What's the biggest difficulty you have with animals?

[Allan Smith]

I don't have stats on my rentals, but I do believe that it's very likely the Numbers above would apply to my business as well. I agree with pretty much all of it.

the key mindset change for me was flooring. I do 100% lvp which is waterproof and durable. I accept pets now and its just a money maker. They do stay longer, pay more rent, and tend to be more responsible human beings.

I will say one downside I've noticed is inspections and maintenance. Some folks have big ol territorial dogs and if tenant didn't want me going in there they could "accidently" leave the dog loose. 

[Jeff Copeland]

This has generally been my experience as well. I tell people all the time, "humans do far more damage than dogs and cats"!

[Chinmay J.]

I have never had any issues with tenants with pets.. I allow them freely. Charge them $200 pet deposit. Most are happy to pay. 

[Jill F.]

Keeping pets out is a losing battle anyway. We figured we might as well make the money. I think accepting pets probably cuts down on ESA scammers too-- most people will pay rather than sneak or scam but they WON"T give up fido or felix.

[Matt Nico]

Hi Everyone. Could everyone give me what they charge for a pet deposit? And is it refundable or non-refundable? I saw one person posted his amount above...I would like multiple opinions. I am about to allow a pet in one of my rentals for the first time. I figured $200 non refundable seems pretty fair.

Thanks,

Matt

[Nathan Gesner]

When we schedule maintenance or an inspection, we always require tenants to remove the animal from the property or have it kenneled. We will soon implement a penalty if they fail to abide. If we show up and find the animal loose, we will make the decision to proceed or to back out and leave. If we leave, we will post a notice that we were unable to complete the visit due to the animal and tenant will be charged a $25 trip charge.

[Emily Sayers]

Emily Sayers, a landlord from Appomattox, VA

We have always accepted pets (we are animal lovers ourselves). I charge more rent per month because of that and get it easily as many landlords in this area do not allow pets. I don't charge extra for pets. We have had little or no damage from accepting animals. I do have a problem with one insurance company if we have any pit bulls or pit mixes, but I just go to another insurance company and they will accept them. I carry a lot of liability insurance and have LLC's.

[Nathan Gesner]

@Chinmay J. @Matt Nico

There are three possible charges:

• Fees are non-refundable
• Deposits are always refundable
• Rent

Make sure you use the appropriate term or it can come back to bite you like a rabid Doberman! 

If you charge a "deposit" then the law will always consider it refundable. This provides you a little extra protection but does nothing to increase your income.

Fees are non-refundable. They can be charged up front or used as a penalty for violations. For example, some Landlords charge a nominal fee for the administrative cost of pet screening or creating a pet addendum. Others charge a large fee up front to off-set the increased risk of damage or as a method of dissuading people with pets from renting. I've seen people charge up to a month of rent as a pet fee, which I find absolutely unreasonable. But, it's a free country and we're all able to run our business the way we see fit.

Pet rent is an increase to the monthly rent that really increases your return. Compare these options:

• $300 deposit: fully refundable, no increase to net income, provides very little protection
• $300 fee: non-refundable, increase net income $300 or provides $300 in additional protection
• $50 rent: non-refundable, increases net income $600 or provides $600 in additional protection
• $300 fee + $50 rent: non-refundable, increases net income $900 or provides $900 in additional protection

There are a variety of ways to structure it but I always recommend fees and rent, not refundable deposits. Check your local market to see what others are charging and what is reasonable for your area.

P.S. I do not recommend you use the term "pet rent" in your marketing, lease, or anything else. Simply increase the rent based on the animal. If rent is $1000 a month and you want to charge $50 per animal, a tenant with two animals would pay $1100 a month rent (a 10% increase). One of the biggest reasons for this is that tenants will remove an animal for some reason and then ask for a reduction in the rent. Don't do it. The rent increase remains in place for the term of the lease, even if the animal is removed one month after occupancy. Why? Because the rent increase is to offset additional damage and the damage could be caused during that one month the animal occupied the property.

[Matt Ziegler]

We allow pets, dangerous breeds excluded, charge a non-refundable fee and monthly pet rent.

We outline this with a pet agreement as an addendum to our leases.

Folks seems to understand, and agree with this.

[Linda S.]

@Nathan Gesner,

We generally accept pets.     One thing I'd say is absolutely require a pet fee/pet rent, and have a non approved pet fee clause.   If you allow dogs,and can do a fenced in yard-- definitely do it.

The only time I've regretted allowing dogs, is when I saw my tenant put her lab  IN THE CRATE OUTSIDE.  She also uses pet pads for a lab.  This is also our worst tenant and we're counting down the days to get rid of her.    We also had someone leave there dog outside when it was 90-100 degrees and the puppy died from heat exhaustion,  (after that,their home magically became  a no-pets allowed!) so while the grass is greener to allow animals-- realize the responsibility/common sense   level of tenants might not be very high.

[Thomas Greer]

Great info here.  I happen to live in a market where "everyone has a dog" and seemingly a JEEP too (Colorado).  So, limiting pets can be prohibitive.

My conversation w/ PM's usually go like this:

Me - Try, "No dogs" this time

PM - good credit, rental history and they have 3 dogs and a bear.

Me - OK.

I can't say damage has been any worse or any undue wear and tear that goes beyond the pet deposit.

Now kids...kids are the real trouble.  However, they are hard to screen out and every tenant that has children always insists on keeping them.

[some levity in my reply, but good info and I like the idea of the monthly pet rent. I don't do that but may try to push it]

[Taylor L.]

Originally posted by @Nathan Gesner:

@Chinmay J. @Matt Nico

There are three possible charges:

• Fees are non-refundable
• Deposits are always refundable
• Rent

Make sure you use the appropriate term or it can come back to bite you like a rabid Doberman! 

If you charge a "deposit" then the law will always consider it refundable. This provides you a little extra protection but does nothing to increase your income.

Fees are non-refundable. They can be charged up front or used as a penalty for violations. For example, some Landlords charge a nominal fee for the administrative cost of pet screening or creating a pet addendum. Others charge a large fee up front to off-set the increased risk of damage or as a method of dissuading people with pets from renting. I've seen people charge up to a month of rent as a pet fee, which I find absolutely unreasonable. But, it's a free country and we're all able to run our business the way we see fit.

Pet rent is an increase to the monthly rent that really increases your return. Compare these options:

• $300 deposit: fully refundable, no increase to net income, provides very little protection
• $300 fee: non-refundable, increase net income $300 or provides $300 in additional protection
• $50 rent: non-refundable, increases net income $600 or provides $600 in additional protection
• $300 fee + $50 rent: non-refundable, increases net income $900 or provides $900 in additional protection

There are a variety of ways to structure it but I always recommend fees and rent, not refundable deposits. Check your local market to see what others are charging and what is reasonable for your area.

P.S. I do not recommend you use the term "pet rent" in your marketing, lease, or anything else. Simply increase the rent based on the animal. If rent is $1000 a month and you want to charge $50 per animal, a tenant with two animals would pay $1100 a month rent (a 10% increase). One of the biggest reasons for this is that tenants will remove an animal for some reason and then ask for a reduction in the rent. Don't do it. The rent increase remains in place for the term of the lease, even if the animal is removed one month after occupancy. Why? Because the rent increase is to offset additional damage and the damage could be caused during that one month the animal occupied the property.

I appreciate that you clarified fees vs deposits. It's quite common for folks to call fees "non-refundable deposits," but deposits are, by definition, refundable.

[Curtis Bidwell]

Our policy is to allow “animals” that are at least 2 years of age (no puppies or kitties), limit 2.  We charge a refundable animal deposit to incentivize good behavior, and additional monthly rent ranging from $15-$50.   We have a written animal policy they must sign off on.  Some of my best and worst residents have been pet owners! 

[Jon Blackburn]

@Nathan G. What do you mean by “screening” animals? Just checking for breeds, quantity, etc.?

[Lucas Miles]

@Nathan G. Thanks for this post, some great information and discussions. On the refundable deposit rather than the pet fee (along with additional rent). Wouldn't refundable deposit give tenants more incentives to minimize pet damages if they can get this deposit back if there aren't damages? End of the day it's the landlords discretion on damages to refund this deposit or not. Curious what other landlords have had success with regarding fee vs deposit.

[Rachel C.]

One thing that can help mitigate potential financial losses to the property due to pet damage is to include a clause in the lease that allows the pm or landlord to change the HVAC filters themselves twice a year and during this time, the landlord or her pm can are also inspected to check all rooms and outdoor areas. If there is a piss smell or damage to the floors and doors, you can catch it early. If pet hair is taking over the unit, that's something to watch for too. If you're not in a state like NY, CA or OR, you can then not renew the lease or evict.  

I have a friend that's a landlord in SoCal. Two small dogs pissed in the same spot so many times in the bathroom, the floor rotted and fell into the lower tenant's bathroom. This was in the Class A neighborhood of Los Feliz, CA. You do the math on how that effected his investment. He has a strict no-pet policy now.

And I mean, let's be honest here, if a pet pisses and craps in a similar place enough times, there is no getting that smell out without removing the floor and effected walls and even then it can permeate all porous surfaces throughout the unit. It really doesn't take long to cause that kind of damage. 

For my one SFH rental in SoCal right now, I did not allow pets at all. But given the data posted above, I realize it's something I may need to consider when I have MFHs and want to keep a large pool of potential renters to choose from.

It's good to hear that so many property owners have not found allowing pets to be a serious drawback when taking appropriate precautions.

[Diane Dono]

Bear Bear, my mini-poodle, please cover your ears;-)....it depends on your market and the amount of desire and tenant demand you have in your rentals area.  I have a LARGE demand and am able to be selective and choose not to allow pets.  As much as we love our pets, they can cause additional damage/wear, and yes you can charge a pet deposit, but I'd rather not even go down that road, since I don't have to, which is each landlords right to make that choice.  HOWEVER, if my rental was in a more competitive, less desirable, area, I would allow pets, with an additional pet deposit.  Sorry Bear Bear!:-))))  

[Jonathan Steiger]

@Curtis Bidwell what does your animal policy entail?

[Rachel C.]

@Nathan Gesner

Just a heads up, this study was funded by North Shore Animal League. So they had a conclusion in mind when they began this study which means any investors relying on this study should be very wary of taking it at face-value. NSAL tout themselves as being 'leaders in the no-kill movement' which at first seems like a humane policy but in reality, animals that are unplaceable due to health or violent behaviors are perpetually traumatized in these shelters since they can't be placed in homes. It is a harrowing life for them.

Big takeaway here - Conducting a 'study' that encourages landlords to allow pets in rental homes furthers the NSAL's financial interests because much of their sources of funding are dependent on being a no-kill shelter. They don't have landlord's best interests in mind. They are using the survey to grow and maintain their sources of revenue by keeping more pets out of shelters because they are expensive to keep. Best to just take these types studies with a proverbial grain of salt. There is a pet lobby actively encouraging policies on multiple fronts. Just in the U.S. pet economy alone, sales are projected to exceed $75 billion this year, up from $72.5 billion in 2018 and a doubling of 2005’s $36 billion. If more landlords allow pets, then this sector can continue to grow more rapidly especially since economic disparity and the multiple crises that have hobbled those unfortunate enough to be millennials make home-ownership completely out of reach for most of them.

[Wesley W.]

Originally posted by @Nathan Gesner:

@Chinmay J. @Matt Nico

There are three possible charges:

• Fees are non-refundable
• Deposits are always refundable
• Rent

Make sure you use the appropriate term or it can come back to bite you like a rabid Doberman! 

If you charge a "deposit" then the law will always consider it refundable. This provides you a little extra protection but does nothing to increase your income.

Fees are non-refundable. They can be charged up front or used as a penalty for violations. For example, some Landlords charge a nominal fee for the administrative cost of pet screening or creating a pet addendum. Others charge a large fee up front to off-set the increased risk of damage or as a method of dissuading people with pets from renting. I've seen people charge up to a month of rent as a pet fee, which I find absolutely unreasonable. But, it's a free country and we're all able to run our business the way we see fit.

Pet rent is an increase to the monthly rent that really increases your return. Compare these options:

• $300 deposit: fully refundable, no increase to net income, provides very little protection
• $300 fee: non-refundable, increase net income $300 or provides $300 in additional protection
• $50 rent: non-refundable, increases net income $600 or provides $600 in additional protection
• $300 fee + $50 rent: non-refundable, increases net income $900 or provides $900 in additional protection

There are a variety of ways to structure it but I always recommend fees and rent, not refundable deposits. Check your local market to see what others are charging and what is reasonable for your area.

P.S. I do not recommend you use the term "pet rent" in your marketing, lease, or anything else. Simply increase the rent based on the animal. If rent is $1000 a month and you want to charge $50 per animal, a tenant with two animals would pay $1100 a month rent (a 10% increase). One of the biggest reasons for this is that tenants will remove an animal for some reason and then ask for a reduction in the rent. Don't do it. The rent increase remains in place for the term of the lease, even if the animal is removed one month after occupancy. Why? Because the rent increase is to offset additional damage and the damage could be caused during that one month the animal occupied the property.

Terrific article and thread! 

One thing to consider is local laws.  In NY it is now illegal to charge a pet deposit or a pet fee. I used to do the latter ($250 for those looking to know) but I have recently switched to a monthly fee.

Nathan brings up a very good point about the wording, and am going change my verbiage next week based on his comments.

It's not the first time I have changed my lease provisions because of Nathan's input.

[Victor Avelino]

What if something happens and the insurance company won't cover because they don't allow that specific type of pet in the policy.

[Thomas Greer]

Thank you @Rachel C.

Thanks for digging deeper. 

[Curtis Bidwell]

@Jonathan Steiger

   ...Always subject to amendment!

ANIMAL POLICY
This policy gives general guidelines as to the suitability of a particular animal. Each resident requesting an animal will be required to sign and abide by an Animal Addendum added to the Rental Contract.

1. We understand the bond that owners have with their animals and so we work to accommodate as many of these situations as we reasonably can, given the limits of the property and the security and sense of well-being of each neighbor. Permission to keep an animal is granted at management’s sole discretion.
2. Management may restrict animals to specific apartments.
3. Tenant agrees to not have animals or temporarily care for the animals of other parties without prior written agreement.
4. While we do not allow a new animal to be added to a lease, we strive to accommodate owners who have had their animal for a minimum of two years.
5. Tenants are limited to no more than 2 animals.
6. Restricted breeds include Pit Bulls, Rottweilers, Doberman Pinschers, Chows, Akitas, Alaskan Malamutes, German Shepherds, Siberian Huskies, St. Bernard’s, Wolf Hybrids, and any mix of any of the above. Again, permission to keep an animal is granted at management’s sole discretion.
7. All dogs must be no more than 30 pounds, and no taller than 15 inches.
8. All animals must have evidence of the required shots, licenses and tags, including tags with name and phone number of owner.
9. Other animals, such as birds and hamsters, will be appropriately caged.
10. The tenant is required to provide evidence of renters insurance with animal liability coverage naming Philia Holding Co LLC as additional insured.
11. If any part of the animal agreement is violated, or the animal becomes a nuisance or a hazard to others, property management can require the animal be removed or can terminate tenancy. If only the animal is removed, this will have no effect on the validity of the signed lease agreement, which the tenant will still have to adhere to.
12. Landlord has the right to make changes to the animal agreement with a 30-day notice.
13. Notwithstanding any other provision, people with visual, hearing and physical disabilities may keep certified service animals. Nothing herein shall hinder full access to the apartments and common areas by persons with disabilities. We welcome legitimate service animals for people with qualified disabilities. Tenant must provide a written statement from a recognized doctor or qualified professional as to the disability need and respective function of your declared service animal, or other allowed accommodation (if not so apparent).

Our animal agreement can be seen at: 
http://philiahc.com/application/

[Account Closed]

@Nathan G.

$25 is peanuts for a penalty. I would charge man hours + mileage + RE-booking fee and double the penalty if it happens twice.

[Percy Matsunaga]

@Nathan Gesner

That’s cool how you were able to put a pic in there.
Id like to ask is that only a laptop feature or can you do it from a mobile device?