The Landlord Lens - Pets

Episode Date: January 14, 2024

In this episode of Be A Better Landlord, Jonathan and Krista dive into the debate of whether or not to allow tenants to have pets in their rental units. We weigh the pros and cons, considering factors such as increased tenant pool, potential property damage, and tenant satisfaction. Tune in to explore the ins and outs of pet-friendly rentals and help you make an informed decision for your investment property.

I'm Jonathan, this is Krista, and we're here to help you be a better landlord. All right, Krista, today let's talk about pets. Yeah. We have done an episode on emotional support animals, very hot topic for landlords. We'll link that below for you to watch. But today we're talking about pets. How are pets different from ESAs? An ESA is an emotional support animal, and that kind of animal cannot be denied from any rental

if they have the proper documentation. The proper documentation is an ESA housing letter. As Jonathan mentioned, we have an episode all about this if you want to learn more. But today we're focusing on pets, which are just animals without a job, right? So it's your dogs, it's your cats, it's your turtles. These are just pets who are chill in existing living life, but otherwise are not supporting you emotionally insofar as they need specific documentation to do so. So putting ESAs aside, pets, animals with no job, as you noted,

just live in their lives, why are they such a hot topic with landlords? Sure. Well, it really comes down to the perceived risk of allowing pets into a rental and then seeing absolute chaos unfold. A lot of landlords are afraid of either facing severe property damage or otherwise making the rental inhabitable for a future tenant outside of the one who has a pet. So to mitigate that, they just say no pets at all. Okay, so there are drawbacks.

As with anything, there are pros and comments. Let's start with the drawbacks. What are drawbacks of allowing pets? Sure. So like I said, the risk of damage, it exists, but it's overblown quite a bit, right? So there are a couple of things that you can do. We'll touch on them a little bit later in order to make your house as pet-friendly as possible. But if we took a look at the actual impact that pets have on a rental, 80% of landlords who allow pets don't see any pet-related damage upon move-out. So that means it's just 12% who do. And while that's still unfortunate, it still requires work for the landlord to then turn around the unit. It doesn't mean that you should necessarily outlaw pets outright, especially if you have a narrow tenant pool where you live.

So what are some benefits to allowing pets in your rental unit? There are quite a few. So first, as we've touched on, the tenant pool expands when you allow pets. A lot of renters own pets. In fact, there is a recent survey that was done where about 90% of renters own pets, the 10% who don't currently own pets, half of those folks are looking to get a pet in the next couple of years. So pets are a hot commodity. Also, about half of the rentals in the U.S. allow pets, which means there's a significant need for pet-friendly housing.

If you allow pets in your rental, you will see more people apply for your rental, greater interest, etc., which can shorten your vacancy cycle. In fact, I believe that vacancy cycles for people who allow pets are 4% shorter than what you would see if you don't allow pets. That can make a real difference depending on your market. Absolutely. Additionally, you are going to get someone who's going to want to live there longer most of the time. So what we see is that people who are renewing a lease with a pet, on average, renew for 46 months. It's quite a chunk of time. Wow.

Compare that to 18 months for a non-pet-owning renter. There's significant savings to be had as a landlord by having a good person in there who is going to stay put. You don't have to deal with trying to find a new tenant, move them in, do the whole shit. bang. Instead, you just stick with someone who's paying rent, being respectful, has their animal, all up and up. Excellent. Yeah. And of course, there's also the fact that this could impact your marketing in a positive way. So as we said, there's a great need for this, but also because there is that great need, that means that you can spend less on your marketing efforts if you're not using a free tool like TurboTenet to get your listing out to people. And I think in a lot of cases, the amenities

that are at your, if you're in a community or at your property, say you have a yard, a lot of those interested renters are likely applying because they want some space for their animal, whether it's a dog or a cat or a turtle or an armadillo. Yeah, in fact, 30% of renters said that they would move for pet-related amenities, whether that's walking trails or a dog park or being close to a vet. So really making sure you're aware of everything that you have to offer with that property, unlocking that potential by allowing pets, could be a really good move for you. Another benefit to allowing pets is that it can actually help your bottom line.

So how does that work? Yeah. So it can help your bottom line in a couple different ways. One, of course, not exactly tied to your bottom line because it's security deposit money, but charging a pet deposit is something that I would highly recommend for anybody who is looking to allow pets in their rental. It acts as a safeguard for any damage that might come up. but in terms of actually impacting that revenue, you could charge either monthly pet rep.

On average, it ranges from like $10 to $60 per pet per month. Or you could charge a non-refundable pet fee. That typically ranges from $100 to $500. You charge it once. They know they're not getting it back. You hold on to it. Adds to your bottom line. Make sure that you check your local laws to ensure that you're following everything to AT.

But by and large, what I see is people charging a pet deposit and then either the pet fee or pet rent, but not all three. Either way, this is money coming in that you didn't have before and it can really add up over time. You know, if you're charging $30 per month for 12 months, that's an extra $360 at the end of the year that you otherwise didn't have and you didn't really have to do much for it. It's always nice. Absolutely. And the new tenant is going to stick around for longer. Yeah, stick around for longer, be more loyal, especially because, you know, they're really wanting to get an implant most of the time when they have pets. So take advantage of that and make sure that you're creating a space where it's safe to do so,

but also not put your property at risk by being thoughtful about different things you can do. What are some changes that a property owner can make in their property itself to make it more conducive to having pets live there, but also make it harder for the pet to damage it? Yeah. So quite a few things, although I'll pick out the top three that we hear about the most. So first off is being very aware of the flooring.

Nobody likes carpet ever. It's gross. When you have a pet in carpet, it gets all the grosser because there's always a possibility that there could be an accident on a carpet or something that you can't, you know, just stain remove easily. So what I would suggest is going in and taking out that carpeting and replacing it either with hardwood floors or LVP, some kind of vinyl, something that still looks nice, but is a lot easier to clean. That makes your tenant happy because they're not stressed about staining carpet. it makes you happy because you have flooring that's going to last regardless of how many furry friends are running around on it. Also looks nicer. It also looks nicer. It looks cleaner. When you're going in and doing that, I would also recommend giving yourself a paint refresh as needed. So semi-glass paint

is easier to clean. If you don't currently have that on your walls, see if you want to add it. Because again, while it's unrealistic that a dog is just going to be throwing up on the walls all the time, It is something that you want to try and plan for and mitigate as much as possible. So put in the effort before they move in, you'll feel better when they are there. All right. So on this show, we always talk about the importance of putting everything in your lease agreement. That's definitely true with pets. So what kinds of things should a landlord put in that lease agreement, assuming they do allow pets?

Yeah. So a couple situations. Let's say first that you don't have any pets, no renter in there currently. I would update my lease to make sure that I have a pet clause in that pet clause. In that pet clause, it would indicate how much someone has to pay for their pet deposit, what that pet deposit goes toward so that they know. And any kind of expectations I have regarding quiet hours, waste removal, training needs, etc. You might also require pet insurance.

It's up in the air. I don't see it done as often, but it's something to consider if you want to have that in the mix. If you already have a tenant who previously didn't have a pet and you're debating whether or not you should allow them to have one, You certainly can. In that case, I would make a pet addendum. So similar language, all of the same information from the pet clause, but just making sure that you're adding it on to the living lease document and getting it signed off by both you and your tenant so that everyone's in agreement. So we always recommend screening tenants. What about screening pets? You certainly can. And in fact, I would recommend that you do, particularly if you're in town.

Just getting a good read on an animal is important, particularly if you expect them to go outside of the unit. So, you know, for your cats, fish, hamsters, gerbils, you probably don't need to screen them. But if there is going to be a dog or a few dogs running around, you might want to get a sense of how they behave around strangers. This is especially useful if you have multifamily property. So just go. See how they interact with you and their owner. If they are trained to sit, stay, come, all of that, ask to see it. I would say don't outright ban dogs who are not trained, but you want to make sure that they have positive of demeanors, that they're not aggressive, not too scared, because anything in that realm

could lead to a situation down the line regarding, you know, biting or barking or something unpleasant. So just make sure that they are a well-socialized dog and you feel comfortable having them in your unit before you agree to move them in. And what about when a dog is not behaving well? If you start to hear from neighbors or other tenants that a dog is causing an issue, not just a dog, any animal. Yeah, you got a real loud hamster. Real loud hamster. I would say, again, hearkening back to the clause, make sure that you have outlined expectations for how the animal will behave and what you'll do or want to do if issues do come up. So, for example, let's say that there's a dog that keeps barking at 3 a.m. Maybe the first time that that happens and you get a complaint, you sit down with the tenant and you let them know, hey, this has happened.

The second time it happens, you require the dog to go to obedience training, something of that nature. Third time, you might have to serve them a notice to quit or comply. That would be unfortunate. We would hope it doesn't get that far. But by having those requirements outlined in your lease from the get-go, the pet owner can decide if that's something they can abide by or not. So it makes things easier if a situation does pop up. So moral of the story is documentation is key.

We're going to say it every episode, and we're saying it again here. Thank you, Krista, for walking us through pets and what landlords should know. If you have any questions, leave them down below in the comments. We'll see you next week. Hello. TurboTenant is the all-in-one platform for landlords to manage their rental properties. From vacancy to tenancy, we have you covered with industry-leading tools and expert advice. Landlord better from anywhere for free at turbotenant.com.