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?

[Rachel C.]

@Victor Avelino

Many insurance companies exclude dogs that were specifically bred for aggression. It's an unpopular thing to say but pit bull-type dogs account for between 60 and 70% of all fatal human attacks even though they make up less than 6% of the total dog population in America. (Forbes article) So if you look carefully at your landlord's insurance policy, you may very well find that if you do allow these dogs into your properties, even if you were deceived about the breed by the tenant, the insurance company can deny covering any damages resulting from these types of dogs. Many shelters and tenants will intentionally try to mislabel the breed as 'lab-mix' or 'retriever mix' to try to get around breed-specific regulations designed to protect against dangerous dogs. 

So you asked what if something happens if there is a fatality or severe disfigurement at your property by a breed of dog that your insurance excludes? Well the insurance won't cover damages and you as the landlord get sued and are responsible for any civil judgements brought against you. It is a somewhat rare occurrence but can be financially catastrophic.

Definitely something to pay attention to if you allow dogs in your rentals.

[Jonathan Steiger]

@Curtis Bidwell thank you, greatly appreciate it!

[Charlie Tunstall]

@Nathan G. I’m getting ready to lease out my first duplex and was leaning towards a No Pets policy. This article has me rethinking that strategy. Thanks for sharing

[Steve Vaughan]

Originally posted by @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! 

Well said, Curtis.

I haven't used the word pet in years.  I have animal policies.  Animal deposits,  etc.  

[Michael Ablan]

@Nathan Gesner -  Tenants with pets is inevitable.  I've stopped even trying to avoid it.  I have a 2 pet maximum with breed and size restrictions, but even that's turning away super qualified tenants.

  I think I'm always going to keep the 2 pet maximum, but I'm getting ready to drop my size and breed restrictions completely.  

It's much easier to ride the wave

[Jai Reddy]

If you allow pets, ensure your outside air conditioner condenser(s) are fenced to keep from the pets peeing onto them. Causes corrosion necessitating a condenser replacement.

This is something that happened during For Sale listing a and was discovered during a Buyer’s home inspection by the HVAC inspector.

[Rachel C.]

@Michael Ablan

Does your landlord insurance policy have any breed restrictions?

[Matt M.]

@Nathan G.

Pets smell. I dislike dogs very much. I love money but not enough to have them ruin my properties.

[Nathan Korownyk]

Given the popularity of pets, and the fact that many people have them instead of, or in addition to children...I don't know why a landlord would eliminate a huge % of the available renters. The only issues I have had are with big dogs in a small space.  Cats and dogs have worked out well for me and provided additional income.

It may not be the best option if you have carpets everywhere, but next reno or next rental, pet proof your place from the start...especially with some type of vinyl plank flooring.

[Nathan Gesner]

Originally posted by @Jon Blackburn:

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

We currently use Petscreening.com which is a free service to Landlords and really saves time.

Things we want to look for:

• Age, size, breed, etc.
• Rental history with the animal, good reference from previous Landlord
• Picture of the animal
• Vet records

Tenant must also sign an affidavit stating there is no bite history, the animal has no destructive tenancies (digging, chewing, spraying, etc.), the animal is leashed and/or under their control outside of the property, they accept responsibility for damage and will immediately correct it, owner will clean p after the animal immediately, etc.

[Nathan Gesner]

Originally posted by @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.

That sounds reasonable, but not realistic without charging a significant deposit.

Let's say Tenant rents a $1,000 home so you charge a $1,000 deposit and a $500 refundable pet deposit. Tenant leaves the dog in the bedroom where it scratches up the door, tears down the blinds, digs up the carpet, and chews on trim. There's $1,500 in damages, which is exactly how much you have as a deposit. But the tenant knows you're going to keep the deposit so he doesn't pay his last month's rent, he doesn't clean, and you discover an additional $600 in scratched doors, stained carpet, etc. You just lost almost $2,000.

Is it any better with pet rent? Nope. You'll still lose money. However, most tenants will be good and you'll make extra money, which will offset the loss from the one bad one. 

I manage about 200 pet-friendly rentals and lose money on 1-2 a year. Most of them get a full refund. About 1% of my tenants cause more damage than their deposit will cover. That means Landlords are making extra money 99% of the time and losing money 1% of the time. I'll take those odds any day!

[Nathan Gesner]

Originally posted by @Rachel C.:

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.

Thank you for sharing that, Rachel. If a Landlord inspects regularly, situations like that would never happen. I try to inspect within the first 90 - 120 days and again about four months later.

[Nathan Gesner]

Originally posted by @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!:-))))  

If the demand is that high, why not allow pets and bump the rent 10 - 20%? Bigger pockets, Diane! Bigger pockets! ;)

[Nathan Gesner]

Originally posted by @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.

Just because they have a dog in the fight (see what I did there?) doesn't mean the data is incorrect. I read the entire thing several times and it jives with real-world data I've gained over the years from thousands of leases, thousands of tenants, and thousands of animals.

When their study says children cause more damage than pets, I agree and it's something I share with Landlords all the time. When they say Landlords are more likely to make more money rather than lose money, I agree and it's something I share with Landlords all the time. When they say the risk is higher because Landlords fail to screen or enforce rules, I agree and it's something I share with Landlords all the time.

[Nathan Gesner]

Originally posted by @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.

Great question! 

There are a couple possibilities:

1. Switch to a different insurer. Many do not restrict based on breed.
2. Require the tenant to purchase renters insurance that covers that breed and require them to include you as "additional insured" or "additional interest" so you are protected under their policy before yours kicks in.
3. Do not allow animals that your insurance provider will not cover.

If your insurance company will not cover certain breeds, I recommend you get the list of breeds from them so you can share that with potential renters. I would put something in the ad like, "Breed restrictions apply" and then make the applicant tell you what breed they have so you can cross-check.

[Nathan Gesner]

Originally posted by @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.

Well, consider the source. I'm in a town where most of my commutes are five minutes or less, so it's really not much hassle.

A contractor will typically charge a small trip fee if they are stood up, just to cover the mileage and little bit of time. Try charging $100 and you'll probably end up with no money and a disgruntled tenant. I prefer to keep it reasonable and likely they'll pay.

[Nathan Gesner]

Originally posted by @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? 

I believe you can only add photos from a computer. I don't use the mobile app much because it has too many limitations.

[Diane Dono]

Originally posted by @Nathan Gesner:

Originally posted by @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!:-))))  

If the demand is that high, why not allow pets and bump the rent 10 - 20%? Bigger pockets, Diane! Bigger pockets! ;)

Lol, that's why I remain at "medium" pockets:)... I've mostly chosen Peace of Mind and Less potential hassle over making the most money... helps me sleep at night better..;) 

[Nathan Gesner]

If you read through my posts, I almost always use the term "animal". I don't have a "pet" policy; I have an "animal" policy. This ensures there's no confusion for people with service animals or emotional support animals. They still have to clean up after them, keep them under control, restore damage, etc. And they're still subject to eviction if they fail or refuse.

[Kevin Manz]

@Nathan G, I appreciate the value you bring to biggerpockets. My experience is diffirent than the majority of this thread. I stopped allowing pets a few yrs ago after having to replace a few floors down to the joices, to get rid of ammonia smell. It turned out to be a great decision. Maybe I'm missing out on pet money, but I can live with it. My turns are so much easier now. Now I am C class, maybe that plays into it? Not sure. I didn't find my pet owners to be very responsible w there pets. If I had higher class rentals, I would certainly consider it.

[Steve Vaughan]

Originally posted by @Nathan Gesner:

If you read through my posts, I almost always use the term "animal". I don't have a "pet" policy; I have an "animal" policy. This ensures there's no confusion for people with service animals or emotional support animals. They still have to clean up after them, keep them under control, restore damage, etc. And they're still subject to eviction if they fail or refuse.

I've noticed that, Nathan.  I'm glad that a professional PM and more of a landlord influencer than I is spreading the correct animal wording.

All except for the title of your post😎

[Gary Abner]

Originally posted by @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

 I advertise the rent amount without pets, I charge $100 extra per month if they want a pet.

I don't call it pet rent I just let the tenant know the rent is $100 higher with pets.

[Jordan Moorhead]

I allow pets in all of my rentals. Personally I love animals and I get higher rent for allowing them! I charge a non refundable pet fee. Totally agree @Nathan Gesner

[Aigo Pyles]

It depends on the market, the owner and the pet. There are always pros and cons.

[Shaun Hunt]

Our luck has been the same. Every purchase we made, that the previous tenants had cats, has been a nightmare! One tenant had his cat locked up with him in his room all day. The tenant would sleep, play video games and the work a little outside the home. Upon purchasing the property, he moved out and holy cow, that room was an absolute disaster! 
Most of you can imagine the smell and mess, so I will spare you the details. Needless to say, the home wasn’t livable because of the one bedroom.

Now, the current tenants have a Rottweiler, which has been approved. My problem is that I just found out they sneaked a pitbull and another renter. Supposedly, they will only be there two more months. Should I make a stink about it or just turn a blind eye?