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Eventually, every landlord has to decide whether they should allow pets in rentals. It can be a tough decision, especially if you are new to real estate. On one side, allowing pets in rental property can broaden your market for prospective tenants, boost your annual income, and possibly keep tenants longer. But there are also big risks associated with being a pet-friendly property. To help make this decision easier, this article will discuss everything you need to know about allowing pets in rentals, including:
- Pros of allowing pets in rentals.
- Cons of allowing pets in rentals.
- Which pets should I allow or not allow?
- How should I screen tenants with pets?
- How can I create a pet-friendly lease?
- What is the proper insurance for pets?
- How can I best protect my property from pet damage?
- Am I required to approve service, emotional support, or therapy animals?
Pros of allowing pets in rentals
Expand your prospective tenants
According to Zillow, 46 percent, nearly half of all renters, have pets. By allowing pets in your rentals, you are widening your market by nearly double the prospective tenants while also reducing the risk of a tenant bringing an unauthorized pet into the unit.
Increase your rental income
A major benefit of allowing animals in your rental is that you can increase your rental income. Pet-friendly landlords may be able to boost their income by charging:
- Higher rent
- Pet deposit
- Pet fee
- Monthly pet rent
While not always the case, some landlords are able to charge higher rent by allowing pets, especially if the area has high demand for pet-friendly properties.
Landlords may also be able to charge a monthly pet rent, which can range from $5 to $25 per month, per pet. If allowable, some states permit a nonrefundable pet fee, which can range from $250 to $500 per pet, in addition to a standard rental deposit. A pet deposit, which can range from $200 to $500, is refundable at the end of the lease, similar to a security deposit. The additional fees or higher rental rates help protect landlords in the event there is pet damage to the property.
Lease laws will differ from state to state, so it's important to check with a licensed real estate attorney to determine what allowable fees can be changed to pet owners renting your property.
Keep tenants longer
Being a pet owner makes qualifying for rental property more difficult, with pet-owning renters filling out rental applications 1.6 times more on average, nearly twice as much non-pet renters. FIREPAW Inc., a not-for-profit, conducted a study that found rentals that allowed pets saw average tenant retention of 46 months, compared to 18 months in rental units that did not allow pets. Since qualifying for a rental can be challenging as a pet owner, the likelihood the tenant will stay longer increases, reducing vacancy and tenant turnover for the landlord.
Cons of allowing pets in rentals
Potential damage to your property
One of the most obvious downsides to allowing pets in rentals is the potential damage they can cause to the property. They can scratch, bite, or stain the floors, walls, blinds, or other furnishings. Odors can be left behind. Even fish tanks can burst, causing water damage to the flooring.
Beyond physical damage to the property, pets can be an unwanted liability, especially dogs. According to a study conducted by the Center for Disease Control, there are an average of 4.7 million dog bites each year, with roughly two-thirds of the attacks happening on or near their owner's property. Requiring tenants to have their own renter's insurance can cover this risk, but it is an additional liability.
|Pros of allowing pets in rentals||Cons of allowing pets in rentals|
|• Wider market pool for prospective tenants.
• Tenants with pets often stay in rentals longer, meaning less turnover and vacancy.
• Opportunity for increased rent.
|• Potential damage to your property.
• Increased liability if the animal bites or attacks another party.
Which pets should I allow or not allow?
If you decide to allow pets in your rental property, you'll have to decide which pets you will and won't allow. Dogs make up around 30 percent of all pet rentals, with cats falling close behind at 24 percent. There are, however, a number of other types of pets a tenant may have which could cause equal damage or liability to the property, such as:
- Rabbits or ferrets
- Reptiles (e.g., snakes, lizards, frogs, turtles)
- Farm animals like chickens or pigs
Some HOA communities such as condos or townhomes will have restrictions for pets in their guidelines. These may limit the number of allowable pets in each unit or restrict pets by weight or breed.
However, the breed or size of a dog alone is not a worthy indicator of risk or potential damage. Plenty of well-mannered, friendly dogs fall on restricted breed lists while plenty of poorly behaved, aggressive, or loud smaller dogs do not.
Which pets you will or won't allow really is a personal decision. Just make sure approved pet types are clearly stated with any restrictions in your lease agreement or pet policy.
How should I screen tenants with pets?
Tenant screening is no easy feat. It's challenging enough to find a qualified tenant, but pet-friendly landlords also have to determine who is a responsible pet owner with a well-behaved pet.
If you are allowing pets, it's a good idea to add general questions to your application to help you pre-screen tenants, such as:
- How many pets do you own?
- Names of pets
- Breed type
- Weight and age
- How long have you owned the pet?
- Do you share the responsibility of your pet with others?
- How does your pet do with other animals, children, or people?
- Have you had any previous incidents with your pet such as aggressive behavior or injuries?
- Is your pet up to date on shots?
- Is your pet spayed or neutered?
- Who looks after your pet when you’re away?
- What flea medication is your pet currently on?
Use your normal screening process for the tenant, but also screen the pet. Ask to meet the pet to assess their behavior. See if they are well behaved, well trained, or possibly aggressive around other animals or people. Call prior landlords to ask if the pet caused notable damage to their property or if they had any issues with the pet, such as noise or undesired behavior. This process is not foolproof, but it can help eliminate pets who may bring additional liability or cause damage to the property.
How can I create a pet-friendly lease?
If you are not allowing pets at your property, it's a good idea to add a pet clause to the lease that states no pets are allowed and the possible repercussions if an unauthorized pet is brought into the rental, which could be eviction or paying a large fee.
If you decide to allow pets in your property, you will want to add a pet agreement or pet addendum to your lease agreement. The pet agreement specifically states which animals the landlord is authorizing to reside at the property while passing all responsibility and liability for the pet to the tenant, including potential damage to the property. This document outlines:
- Specific pet policies (such as what happens if the pet is a nuisance to neighbors)
- Rules and requirements (such as picking up after your pet and leashing or caging rules)
- Fees, including nonrefundable or refundable pet deposits, monthly pet fees, and fees assessed in the event of damage
It is also a good idea to add a clause into the agreement that states what happens if the tenants acquire an additional pet after they move in without seeking landlord approval. Some leases will require the entire upfront pet fee or deposit with monthly fees from the time the dog was acquired for the lease term.
If the pet or tenant is in violation of your pet agreement, make sure your addendum allows you to retain the right to remove the pet and tenant and terminate the lease.
What is the proper insurance for pets?
To reduce your risk and liability, you should require your tenant to have renters insurance, which covers liability if their pet injures someone else or causes harm to the property like starting a fire. Not all issues are covered with a renters insurance policy, like a fish tank breaking and causing water damage, so it's important to know what is and is not covered for the landlord and tenant.
Your insurance company may also have certain restrictions and may not insure a rental property with a non-covered pet. Make sure to check with your insurance company asking what their pet policy is and if there are any specific restrictions, such as breeds that are not covered.
How can I best protect my property from pet damage?
Putting the proper insurance in place and getting a substantial pet deposit or monthly pet fee are a few ways to mitigate possible pet damage to your property, but there are also things you can do around the property to help.
Installing durable flooring (such as tile or vinyl) that doesn't scratch or hold stains and odors easily will increase the longevity of your floors.
Fencing the property, if possible, is a good idea because it allows the pet to use the restroom or be outdoors without the risk of escaping. It also lowers liability and risk by keeping the pet protected from other animals or people while on your property.
Am I required to allow service, emotional support, or therapy animals?
The American with Disabilities Act (ADA) and the Fair Housing Act grant certain protections and rights to tenants who have a service animal or assistance animal because of a disability such as a physical or mental impairment that significantly limits a person's daily life activities.
Service animals complete specific tasks or jobs for their owner, such as a guide dog, and for most are required to be with their companion at all times. Assistance animals are in a different legal class as service animals, and do not need to be trained on a task or job such as a dog that detects and alerts their companion of oncoming seizures or a cat who alleviates a person’s depression or anxiety.
If you have a tenant that states they have an assistant animal and the need for the animal is not apparent, ask for a letter from a medical professional stating their need and the animal's job for the person.
You as a landlord are required by fair housing laws to provide "reasonable accommodation" for the animal, are not allowed to charge pet fees or pet deposits. You can, however, request payment for any damage caused to the property by the animal as long as you would normally charge the same to nondisabled tenants. If the animal is causing a nuisance, you can follow legal proceedings to try and have the animal or tenant removed.
Pets can be an added risk and liability, but most of the risk can be hedged with renter's insurance and increased income and fees. Allowing pets is becoming more popular, although there are still far more no-pet rentals than pet-friendly ones. Weigh the risk-to-reward and decide whether the potential increase in return on investment is worth the potential damage or added liability for you.
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