Many real estate investors choose to prohibit pets at their rental properties. That’s understandable, as it just seems simpler and safer. And in some ways, it is. But there are compelling reasons why you should allow pets at your rental properties, as well as effective ways to mitigate the risks that come with permitting dogs and cats.
This is especially true if your rental properties are single-family homes. Some issues, like barking dogs disturbing neighbors or other tenants with allergies, are more of a concern in apartment complexes and other multi-unit buildings.
Let’s take a look at some of the key reasons it can be advantageous to allow pets at your rental properties, and how to reduce the risk of downsides that make your life more complicated or that eat into your profits.
Benefits of Allowing Pets in Rental Properties
- With more than 2/3 of US households owning a pet, you gain access to a considerably larger pool of potential tenants. This can reduce vacancy and increase what you charge for rent with high demand.
- People who take on the responsibilities of pet ownership tend to be more responsible in general, making them more reliable, respectful tenants.
- People with pets also tend to have more stable, higher income, making them safer tenants; in his book Practical Apartment Management, Edward N. Kelley says 65 percent of pet owners make more than $50,000 per year.
- Pet owners often stay in a rental property longer, partly because of the hassle and associated extra expenses (like a nonrefundable pet security deposit) of finding a pet-friendly home. Also, pets make a place feel more like home for animal lovers, which can prolong tenancy.
- And speaking of pet security deposits, it’s expected that you’ll require one. Be sure to check local laws about deposits—often, this can be nonrefundable and can add to your profit on the property, but in some places, you can’t legally charge lessees nonrefundable deposits.
- You can also include a nominal amount of monthly “pet rent” (perhaps $15 to $30) as a way to charge higher rent; don’t disclose this before finding out whether a prospective tenant has pets, though, or you increase the odds that they’ll try to hide their pet.
- If there aren’t many pet-friendly rental options in the immediate area, allowing pets can also justify charging slightly higher rent in general.
Protect Yourself Against the Risks of Allowing Pets
While there are plenty of good reasons why you should allow pets at your rental properties, there are potential downsides. Here are a few ways to limit the risks and possible losses.
- Include your pet policy as a detailed addendum to the lease.
- As mentioned above, be sure to charge a nonrefundable pet deposit of a few hundred dollars to cover damage that may be done by a dog or cat if you’re allowed to; if not, require a refundable one or charge a higher security deposit.
- Don’t use carpeting in your rental properties, as it’s highly susceptible to stains and other damage from pets; it also tends to stubbornly hold in pet odors and dander.
- Install durable flooring that’s resistant to scratches, such as bamboo, luxury vinyl tile, or a scratch-resistant faux hardwood.
- Conduct scheduled quarterly inspections of your rental properties. This is a smart practice in general, as it can make you aware of problems and fosters a better relationship between you and your tenants. It also prevents tenants from attempting to sneak in pets.
- It’s a good practice to require that your tenants have renter’s insurance; if they own a dog, also require that their policy covers dog bites/attacks. As a landlord, you’re not likely to be liable if a tenant’s dog attacks somebody, but this is an easy, sensible precaution.
- Check your insurance policy to ensure that you have appropriate coverage in place. Ask your carrier whether your coverage has any limitations or exclusions, such as certain dog breeds.