Pets and Rental Properties
By Pierre Mouchette | Real Property Experts
Are Pets a Potential Income Source?
One could summarize that a vacancy is money lost so, having a tenant with a pet reduces vacancy time. In rental management, a vacant property is money lost, and the longer it sits empty, the less money it makes!
Why Have a Pet-Friendly Property?
The following are great reasons or benefits to allowing your tenants to have pets:
According to the Zillow Consumer Housing Trends Report of 2018 - “Pets occupy 46 percent of rental households, with dogs (30 percent) and cats (24 percent) in the top two spots. Renters are also twice as likely as buyers to live completely alone, not sharing the space with a pet or person (14 percent of renters do, compared with 7 percent of all buyers)”.
This research indicates a shortage of pet-friendly properties compared to the number of renters seeking pet-friendly housing. In allowing pets at your rental, you open your tenant pool and increase the desirability of your rental. This will lead to shorter vacancy times between tenants.
The American Humane Society has provided the following facts:
If you decide to allow pets, you can still restrict certain types or sizes of animals. Be sure to specify in your lease and your rental listing exactly which kinds of pets and how many are accepted at your property.
You can also stipulate that you meet and approve the pet first. And, if your jurisdiction permits it, you can require a separate pet deposit. You can create a separate pet agreement or spell out any other rules in your lease. For example, you can require that dogs and cats be licensed, spayed or neutered, and be current on vaccinations.
One thing to keep in mind: Some insurance companies and homeowners’ associations have breed restrictions or other pet rules, so check before updating your rental agreement.
Another option for pet-friendly properties comes in the form of monthly pet rent. Pet rent is collected along with your tenant’s standard monthly rent, and over the lease term, this pet rent can add additional income to you.
Increased Renewal Rates
In general, your pet-owning tenants are more likely to become long-term renters since pet-friendly rentals are more difficult to find. When you build routine rent increases into your lease agreements, these long-term, pet-owning renters are the cream of the crop for an investor.
Note: when renewal time comes, it will behoove you to perform a spot inspection. This will help to identify any pet damage or problem areas that should be addressed before they become more expensive down the line.
Funding Pet Damage
If your state permits it, you can charge an additional deposit on top of the standard security deposit from your pet-owning renters. This Pet Deposit offers extra security and allows you to have additional funds to cover the cost of pet damage or excessive cleaning. If you only collect a standard security deposit and a pet causes more damage than the deposit covers, you will have to invoice the tenant to cover the cost beyond the security deposit (i.e., you will then be actively seeking payment from a renter who has moved, and they might be hard to track down).
The Legality of Pet-Friendly Properties
Ensure that you verify compliance with your state and local laws about increasing deposits and the legality of non-refundable fees. Your lease should have clear and concise language about the types of pets acceptable at the property and what additional rent, fees, or deposits are associated with a pet-friendly rental. You should also require pet-owning tenants have renter’s insurance. All paperwork must be validated through your legal adviser!
A Special Note About Service Animals, Emotional-Support Animals, and Therapy Animals
As a landlord, you have some control over whether you allow animals on your property, but some animals are protected under fair housing laws.
Assistance animals are not pets but assistants to people who have a disability. These animals are usually dogs but can be other types of animals too. The animals are specially trained to perform disability-related tasks, such as guiding a person who is blind, pulling a wheelchair, alerting an owner to an impending seizure, performing complex household tasks, and protecting their companions from oncoming traffic.
Emotional support animals are also considered assistance animals under fair housing guidelines. These animals are often used as part of a medical treatment plan to provide companionship, relieve loneliness, and sometimes help with depression, anxiety, and specific phobias. However, they do not have special training to perform tasks that assist people with disabilities. The need for an emotional support animal is not grounds for reasonable accommodation under the Americans with Disabilities Act. But it is under fair housing laws. As a landlord, you must offer reasonable accommodation to renters with emotional support animals or someone who develops a need for one while they are your tenant. This is the case even if you have a no-pets policy.
Tenants who have service animals or emotional-support animals (ESAs) are protected by the American Disabilities Act (ADA). As a housing provider, you are required to make reasonable accommodation for these renters and their animals. Renters with a service animal or an emotional support animal are exempt from paying an additional pet deposit, pet fee, or monthly pet rent. They will, however, need to provide proper documentation regarding the need for such an animal, as required by the ADA and Fair Housing Laws.
Note: you cannot ask for or collect an additional deposit or extra rent for an assistance animal. Additionally, you may not impose weight, breed, or size restrictions on an assistance animal. You can charge renters a fee if the assistance animal causes damage to your property.
Tenant – Persuade a Private Landlord
To help have your pet accepted in your transition to a new rental, you should do the following:
For Your Information (FYI)
What Is the Difference Between Pet Deposits and Pet Fees?
The difference between pet deposits and pet fees is that pet deposits are refundable, and pet fees are not. States vary on whether you can even charge pet deposits or pet fees. Verify what your state laws dictate.
If you charge a ‘pet deposit,’ you need to return it if there is no pet damage when the tenant moves out. If there is damage, you need to send your tenant an itemized list of how much you spent to repair the pet damage, which justifies keeping all or part of the pet deposit, just as you do for a security deposit.
A ‘pet fee’ is simply the one-time admission price to have a pet in the rental. It does not typically cover any damages the pet might cause.
What about Pet Rent?
Pet rent is a recurring monthly rent for the pet. The amount of pet rent could vary based on the number and type of pets allowed. Pet rent is becoming more popular and is gradually replacing pet fees.