Are Landlords overlooking opportunities to increase profitability by not offering pet-friendly rentals?

Are Landlords overlooking opportunities to increase profitability by not offering pet-friendly rentals?

Elsie Lodde
Landlord and Founder of Recycled Pets NorCal

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When I was 21, I moved into a house (which I shared with 2 foster children as well as my cousin and her baby).  I grew up an animal lover and a random trip to the feed store meant I came home with a bunny.  I asked my landlord if I could keep the bunny, and he said as long as it wasn’t inside that was fine.  My boyfriend (now husband) started making him a hutch which we never got to use because in a matter of about a day, raccoons ate my bunny.  I was devastated (and have harbored an animosity towards raccoons ever since).  My next pet was a kitten which I acquired about a month before I was supposed to move out, since my landlord wouldn’t let me keep it inside, my parents agreed to watch it for me. They gave it a god awful name (Ms. Kitty) and decided they wanted to keep her for themselves. It turned out that cat had feline leukemia (I know, with a name like that you would expect kitty AIDS instead) and would have a short life and so my next pet would be a cat I still have (14 years later). Now, I own a rental house, which has been occupied by 3 renters, all of which were pet owners.  Over the years, I have continued to require different things from my renters and this also includes my requirements for pets.

These adopters of ours rent from a really nice dog friendly apartment complex.
These adopters of ours rent from a really nice dog friendly apartment complex. The rental complex actually refunds adoption fees for those who choose to adopt. Their complex considers themselves to be very pet friendly, although, there are no weight restrictions, there are many breeds banned by their complex (including most terrier breeds).

The three renters who have occupied the house have done so until they either purchased homes of their own or moved far away for jobs.  According to empirical research done by FIREPAW, tenants who live in pet friendly rentals and have pets live there for an average of 48 month. This is important, because it is significantly higher than the average rental time of 18 months for non-pet owners.  It is unusual, but they also found that tenants who keep animals illegally in non-pet friendly rentals stay on average of 26.5 months.  Which goes to say that even they stay longer than non-pet owners; however, that they stay nearly half the time as pet owners who legally are allowed to have pets in their rentals.  The longer tenancy is likely because of the difficulty of finding pet friendly rentals, like in my experience as a renter, they stay until they have no choice but to move or purchase homes. According to the survey done by FIREPAW, only 9% of the housing allowed pets without regard to size or type. This means for those renters with certain breeds of dogs, for examples Pit Bulls, it is very difficult to find housing and so the people who rent and have these loved companion animals do not have many options available to them (increasing average rental time).   As most landlords know, the worst part of having a rental is dealing with people leaving, clean up, and finding new renters, so the less often you have to go through the process, the less tedious being a landlord actually becomes.

dog_insuranceOn top of having the benefit of less energy, money and time, with clean up, there is other financial gain to be had for those who opt to rent to pet owners.  FIREPAW also found that pet-friendly rentals were, on average, rented at $222 more a month.  This is because with a greater pool of people wanting to rent from you (on average 50% of renters have at least one pet), it allows the landlord to charge more for their housing.  Some places are also now charging “pet rent” as a monthly charge for pets, on top of a larger pet deposit being paid.  I spoke with Donna Mangurian, a property manager, and she said that the properties she works with do not take pet deposits, but rather simply charge pet rent because damage is often too “hard to prove in court.” Sounds strange, but in her experience, people will argue it was not a pet that urinated on the carpet but rather a person and lose out on the pet deposit. So this is something all property owners may want to consider.  Taking into consideration the extra rent, on top of the average length of rental, it seems quite clear that (just from a monetary standpoints) there are benefits for the property owner to be pet-friendly and adjust their rental practices accordingly. Landlords with pet friendly rentals also found that their vacancy rate was lower, the amount they had to spend of advertising was lower, and amount of time spent on marketing was also lower.  This is because the average time it took to rent out pet-friendly housing was only 19 days, instead of 29 days for non-pet friendly rentals.

Some people think there is a difference between pet loving people and those who do not have pets. My chiropractor has a dog named Joey. She comes with him to work every day.  He says that he has found that people like pets are much nicer and down to earth and so the idea that her being there may drive away people who do not like dogs is an acceptable risk.   So beyond his idea that pet people are the nicest people, Practical Apartment Management states that 65% of pet owners earn more than $50,000 a year (on average make more than those without pets).  Furthermore, the care they take of their animals may also reflect of the care for which they will treat your property.  Elaine Lee says “responsible dog people make fantastic tenants.” She states that “many of the qualities it takes to be a successful pet steward are the same qualities it takes to be a good tenant,” the qualities she speaks of are “discipline, consistency, cleanliness, and empathy.”  Furthermore, we have all heard that pets can help reduce stress, and so a happy tenant is generally a less problematic one.   Add that to the fact that twice as many applications are turned in for pet-friendly rentals, and landlords with pet-friendly rentals can really be picky about whom they allow to live in their home which ensures a great fit.

 

What are the downfalls of renting and are they as serious as you thought?

599203_311831548939858_84581917_nThe biggest concern most people have about renting to people with animals is possible damage. Generally, flooring is one of the largest concerns for landlords (something I know too well). Fred Thompson, president of the National Association of Residential Property Managers, says if you do not allow any pets then it is likely it will take much longer to fill your rental, he does the basic math and says “If it took an extra two months at $1,000, then … not taking a pet costs $2,000,” Thompson added, “Well, $2,000 will pay for a lot of carpet.” Even taking in consideration any damages that might be expected, you can make your rentals more pet friendly in order to mitigate any possible damages (like installing laminate, tile, or simply sealing the concrete sub-floors which I am having done at my personal home), making sure fencing is secured, or having metal doors instead of wooden ones. But even with the potential damage, the landlords surveyed by FIREPAW found that the worst damage averaged only $430 and the difference between damages caused by pet and those by small children show clearly that small children are a larger indicator for damage than pets (so opting for the family with small children over the older couple with a rottweiler may not be beneficial at all).

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Other issues to consider

service dogs

According to the Americans with Disabilities Act and Fair Housing Act, you cannot deny a renters pet if it is a service animal (regardless of breed).  This is because a service animal is not a pet. The ADA requires you to modify your “no pets” policy. This does not mean you must abandon your “no pets” policy altogether but simply that you must make an exception to your general rule for service animals. You can ask for a note from their physician verifying their need for an assistance animal. In this case,  not permitting pets does not mean that legally a tenant cannot have one. It just means you miss out on the opportunity to charge pet deposits.

How-Does-Homeowners-Insurance-Handle-Pets

Insurance is something every home owner (and renter should have).  Landlords should consider which insurance company they should get if allowing pets. Many insurance companies do not cover certain breeds of dogs, so in order to cover yourself (and this is a good idea in case someone has a pet without your permission or with a service animal as mentioned above) you should get insurance that covers all breeds of dogs. A few of the companies we suggest are State Farm,  Liberty Mutual, Einhorn and USAA as their policies does not exclude certain dog breeds. Jackie Wylie requires her tenants to carry renters insurance and if they have dogs not covered by standard insurance companies (sometimes listed as “dangerous breeds”), she asks that they add additional liability on for their pet(s) as well.

Spay/Neuter clause- There is evidence that altering dogs may reduce aggression in them and furthermore, having an altered dog may also decrease unwanted behavior such as marking in the house (read more about behavior benefits).  So this is one screening tool you may want to use when deciding who is going to live there. A few property owners I spoke to require pets to be spayed or neutered (unless they are not able to be). This way they do not have to worry about the problems mentioned above, but with females in heat staining carpets or with litters of puppies destroying the house or yard. Also, since they are pet advocates, they see this as another factor of being a responsible dog owner.

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Indoor/Outdoor dogs- One concern for my neighbors was that I had a tenant whose dog was outside all the time. Dogs left outdoors tend to be more bored and they bark and can be disruptive and have more of an ability to injure neighbors, kids, or others as well to do destruction to the yard and property (read more about the problems with outdoor dogs) .  Dogs that are kenneled or chained are prone to be more aggressive which can also be a liability (find out more about tethered dogs here) . For these reasons, and so I do not have to get complaint calls from the neighbors, I require dogs be kept as indoor pets and instead recommend crate training.

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People keeping pets without permission- over 20% of tenants who replied to FIREPAWS survey said they kept pets illegally.  This is the worst case scenario for a landlord as you have the potential deal with all the problems of having pets in your rental, without any of the benefits of added rent, contracts and deposits. We see this quite regularly in rescue, if you check your pet ads on CraigsList, you will see a lot of ads posted when people were caught with illegal animals.  Doing rescue, we verify pet requirements, and it always shocks me when people put on their applications they aren’t allowed to have a pet at their home, but they will hide them.  We do not adopt to them because we know this is a vicious cycle.

 

Whether you allow pets or not

I would recommend all landlords include a pet addendum in your lease and require every tenant to sign it. This policy should clearly state your pet policy (whether or not you allow animals) and your expectations of the pet owner. Make it clear that by signing the lease, the tenant agrees to these terms and if they violate these terms, it will be considered a breach of contract. My rental agreement states that “The Tenant agrees that any pre-approved animals must be kept in a manner which does not disturb neighbors nor allows them to destroy the house (i.e. not left outside to bark, but if needs be crated inside the house when left alone).” This is pretty simple wording, but as I have not found a lack of people interested in my rental home, I have made sure to find renters who treat their homes and animals well and so I have had great luck and have not needed any further requirements.

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Now that you understand the benefits to renting to people with animals, how can you make your property more pet friendly?

I mentioned previously the importance of carrying insurance that will cover all animals that live on your property, but there are more things you can do other than just not limiting size, age, or breed of animals allowed.  One group of properties charges a pet deposit, however, they refund the cost of adoption fees if the animal is adopted. This helps to encourage people to adopt rather than to buy a dog. If you own several properties or rentals, having an adoption fair could also be a great way to do this (I recently saw an apartment complex that did this and homeowner-animal-insurancewaived pet deposits for adopters at the event).  Pet deposits or pet rent are just one of the few benefits landlords in pet friendly rentals benefit from. Making sure there is a secure fence and pet friendly flooring are always a great way to attract and invest in your pet residents.

 

Ways to pick out responsible pet owners

As mentioned before, many insurance companies and property owners require animals be spayed and neutered, some as for training classes taken as well.  As you can be choosey about who you rent to, it is best to also meet any potential animals before hand. When speaking with possible tenants, make sure to also interview them about their pets.  It allows you to see the training and condition in which their pets are kept and may help in the interview process.  Because pet owners are oftentimes so desperate to have pet friendly housing, they will be more inclined to take the time to complete a pet resume this will also allow you to know more about any animals and their training before making the decision on whether to allow them to live there or not.

What do you do if someone moves leaving behind a pet?

First thing, I would recommend contacting the renters. We see this happen on occasion as the renter tries to find new housing for their pet, or a new home with the animal as their new housing is not pet-friendly.  If you cannot get a hold of them, you can contact you local rescues or animal control about the situation. On rare occasion, we have seen animals left behind in terrible conditions. Any illegal treatment of animals should be prosecuted, so I would recommend getting the police, animal control, the local human society, or whoever processes neglect/abuse cases involved.

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