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?

[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.