There are lots of pros and cons to allowing animals in your rental properties.
Here’s how to decide if renting to pet owners is right for you.
As more and more Millennials (those between the ages of 24-39) are opting out of parenthood, pets are more popular than ever. And all it takes is a walk down Winter Park’s Park Ave. or a scroll through Instagram to know that pets aren’t just “big business,” they’re part of the family.
And odds are good that your tenants (or prospective tenants) agree.
Whatever your personal feelings on domesticated animals, renting to pet owners may be the perfect decision to make your experience as a landlord more profitable. Here are some of the pros and cons to help you decide for yourself.
Pros of Renting to Pet Owners
One of the biggest benefits to allowing pets is more potential tenants. More than 68% of U.S. households have a pet of some kind, but it isn’t always easy to find a rental where furry family members are welcome. (As amazing as your place is, your tenants probably aren’t willing to give up their pet for it!) Making your rental property “pet-friendly” is an easy way to stand out from the competition.
And as every landlord knows, happy tenants lead to lower turnover rates. Since their pool of available rental homes is smaller than a non-pet owner’s, knowing they get to keep their beloved companion may be a deciding factor in whether or not to renew their lease.
Ultimately, most landlords who decide to allow pets do so because of the potential for more income. Pet deposits, pet rent,and pet fees (in addition to the existing security deposits) can boost your revenue without the need for costly renovations. And if you are willing to take in large breed dogs, you may be able to charge even more.
However, the Americans with Disabilities Act prevents you from charging pet deposits and fees for service animals or emotional support animals.
Cons of Renting to Pet Owners
Of course the biggest downside is that pets—especially cats and dogs—can cause damage to your investment. Chewing, clawing, and, ahem, other messes can be time-consuming and expensive to reverse after your tenants move out. Sure, you can always charge a pet deposit and other rental fees, but there’s always the chance that it’s not enough to cover the full extent of the damage (and it can collecting the rest from a tenant who’s already moved out can prove difficult.)
Another drawback is the allergens and odor they can leave behind. It may not be feasible to have the carpets and air ducts professionally cleaned between every tenant.
Finally, many landlords opt against renting to pet owners because of the liability risk. What if your tenant’s dog bites a neighbor or visitor? In most cases, the animal’s owner would be solely liable for any injury or property damage their pet causes, but there are some situations where you may be held liable as well.
Even if you choose not to allow pets, you will have to make exceptions for tenants with service animals or emotional support animals. According to the ADA, you will have to make reasonable accommodations for these animals (and you are not legally allowed to charge pet fees/deposits).
Creating a Pet Policy
Whether you decide to allow pets or not, you will need to include verbiage on the lease so that your tenants are aware of your policies.
If you are allowing pets, this is usually in the form of a pet addendum. However, if pets are prohibited, you will need to add a “no pets” clause to the lease. This will prevent your tenants from later claiming that they “had no idea” that pets weren’t allowed when they brought home a 150-lb. Great Dane.
But creating a landlord pet policy isn’t as easy as you might think. Here are the steps you’ll need to take to create your own pet policy.
- Check with your homeowner’s insurance carrier to see if they have any breed restrictions. You might not have a problem with Rottweilers, but if your insurer does, this could create a headache later.
- Add a Pet Addendum to the lease and require ALL tenants to sign it, even if they don’t have a pet (they might get one later without consulting you). Make this addendum as specific and thorough as possible. Will you place restrictions on the species, number, breed, or weight of animals? Will you require that they be spayed or neutered?
- Decide how much and how often to charge your tenants for the privilege of owning a pet. Will you charge a deposit and a monthly rental fee? Will the deposit be refundable? You will also need to specify what the pet deposit/fee/rent covers to prevent discrepancies later on.
- Do a background check on the animals in addition to their owners. Ask the owner about their pet (how long they’ve had it, whether there have been prior complaints, and who will watch the pets if they are away) and get references from ex-landlords. After all, breed stereotypes are just that: stereotypes. “Vetting” an animal’s unique temperament will give you a better idea of what to expect.
- Require vaccines and proper identification (collars and tags) at all times.
- Require your tenants to carry pet liability on their renter’s insurance to prevent against a legal headache later.
Only you can decide whether renting to pet owners or not is the right idea for you. However, when you’re aware of the pros and cons (and have a plan for lowering your risk), you can make an educated decision that you feel comfortable with.
At American Home Team Realty, your comfort is our #1 priority.
With our full-service property management, you can finally experience the joys of a truly passive income. From tenant screening and rent collection to bookkeeping and maintenance, we can take the stress out of your investment property!
Contact us today to see the many ways we can make life easier for you!