Pets are on the rise
According to a survey conducted by the American Pet Products Association, pet ownership is up to 68% of U.S. households, while 83% of pet owners consider their furry friends to be a member of the family. These statistics are indicative of the trends we notice in multi-family housing.
As millennials are delaying home ownership and children, the larger apartments are attracting qualified tenants through dog parks and pet services. They tend to increase profits through these services, requiring additional deposits and monthly payments for pets.
As a landlord, you are bound to attract more tenants by setting up the property to welcome pets.
Service and companion animals are not considered pets. On the application, a prospective tenant may not list any pets but have an animal for disability reasons. Landlords cannot refuse to make “reasonable accommodations” to impaired tenants, unless the landlord suffers financial or administrative burdens due to these accommodations. This is in accordance to federal law 42 U.S.C. § 3604(f)(3)(B) and the landlord could owe damages to the disabled tenant. For additional info, visit the Assistance Animal section from Project Sentinel.
FAQ: What is the difference between a service animal and a companion animal?
Service animals provide specific assistance to their owners. Companion animals are not trained for specific tasks, but provide loving companionship to people suffering from depression, post-traumatic stress disorder, or mental illnesses.
A landlord cannot deny or charge tenants extra for service and companion animals.
Should landlords allow pets?
Traditionally, landlords have opted to not allow pets in their rental units for a variety of reasons, but recent trends have shown a rise in pet ownership. Ultimately, it is the landlord’s decision on whether pets will be allowed or not. Here are some pros and cons to weigh when making this decision.
- Attracts up to 50 percent more tenants.
- Increases monthly rent with additional pet rent
- Reduces turnovers since tenants with animals tend to stay for longer to avoid environmental changes to their animals
- Damages caused by pets may cause additional turnover hassle
- Allergies, particularly for neighboring residents
- Noise, such as barks
- Physical injuries caused by the pet*
*Tip: Check your homeowners insurance to confirm it covers the pet. There are many dog breeds that are not covered by homeowners insurance.
Charging for Pets
Allowing pets can be financially beneficial for landlords. There are a few different payment options landlords have if they allow pets in their property.
This is a nonrefundable fee paid up front by any tenant who plans to own a pet in the rental unit.
Pet rent is a monthly charge paid by the tenant, on top of their normal rent. This option considers the pet another resident and is charged for the duration of the pet’s stay.
Pet deposits are the same as a normal security deposit, but it is specific to having a pet. Pet deposits can get you into trouble from an itemization perspective and therefore it is not recommended to distinguish between the pet and security deposits. When you are deducting from the deposit, a pet deposit can only be used to deduct damages caused by the pet. Many times it can be difficult to tell whether a child or dog caused particular damage. Instead, combine the pet deposit into the original security deposit to avoid these discrepancies.
Average pet rent
Research from nationwide listings show the below as the averages charged by landlords to tenants. These don’t include any pet deposits or upfront pet fees.
|INCREASED REVENUE PER RENTAL UNIT|
|Average Pet Rent||$15-35 / month / pet|
|Average Pets||1 pet per household|
|Average Turnover (time in the rental)||1-2 years|
|Average Increased Revenue||$450+ / year|
Many landlords and managers are concerned about the damages caused by dogs and cats. The security deposit, which will include an additional amount for pets, should cover this damage. And, if you perform annual inspections, then it should minimize the risk of damages going over the deposit amount. You can read more about inspections here.
Tenants with certain breeds
Aggressive breeds, such a Pitbulls
As a landlord, you may worry about the breed listed on the tenant’s application. (Tip: always ask for the type, breed, and weight of any pet listed on a rental application.) Some breeds, such as Pitbulls, are known to be “aggressive by nature.” Many of our beliefs on Pitbulls and other similar breeds are based on stereotypes we have heard or read about, but you may be surprised to hear that most of these claims are false. According to petfinder, Pitbulls are not inherently angry and vicious dogs. While genetics do play a part of a role for determining how a dog will act as an adult, the pet owner is the majority influencer on them.
The very first step in the process is to determine whether homeowners and landlord insurance policy covers certain breeds. Many insurance companies exclude certain breeds of pets from their policies, which exposes the landlord to risk. If the pet’s breed is not covered by your insurance, you open yourself up to potential liabilities by renting to them.
When your insurance covers the breed, another way to mitigate concerns is by screening the dog as if you were screening a tenant. There are two ways to screen animals:
- Determine history of aggression by inquiring with previous landlords about the pet’s behavior
- Get a sense of their personality by meeting the dog beforehand
Small dogs vs. Large dogs
If your are concerned that a tenant may bring a dog larger than you would think appropriate to your property, you can restrict the weight in your rental advertising. Smaller dogs tend to work better in apartment-like settings, as they are less likely to damage the unit and won’t make as much noise bothering neighbors. Both small and large dogs are capable of having high-energy tendencies or being quiet and easy-going; it is ultimately up to the landlord to determine if they think the dog will be a good fit for the unit.
What about cats?
Similar to dogs, cats have been on the rise as companions. AVMA published U.S. market research that 36 million households had cats in 2012, and this number increasing each year. Cats have been known to be a safer alternative as they are less maintenance, rarely make noise that disrupt neighbors, and less likely to cause damage to the property. Similar to dogs, it may be a good idea to meet the cat. Some additional questions include whether or not the cat has been spayed.
Below we have listed some of the pros and cons to help with your decision of allowing cats.
- Less likely to cause as much noise as a dog
- Added company for tenants that may live alone
- Can hunt bugs, mice, and rats that may appear on the property
- Fleas and Mites
- Allergies for neighboring residents
- Scratching doors, walls, etc.
Pet section in the lease agreement
Depending on your pet policy, or your building’s pet policy, the lease should clearly articulate the terms. If you have certain stipulations, specify them in the lease. Here are the top examples for stipulations in the lease:
- Description of the pets
- Clearly outline the type, number and weight of the pets. A comprehensive description of the pets allowed on the premise will prevent tenants from adding pets to their household without proper, additional approval.
- Renters insurance
- If you are to allow pets, requiring your tenants to carry renters insurance can be a way to protect yourself from any accidents or injuries caused by the pet.
- Expectations of the pets
- Be sure to articulate your expectations for the pet. This could include terms such as cleaning up after the pet and specific outdoor areas allowable for the pet. Also include in detail one of the three payment structures outlined above. Including these items clearly in the lease can eliminate many of the discrepancies often seen when renting to pet owners.
And as a reminder, always consult a lawyer and check your State's laws before putting new clauses into a standard lease agreement.
To summarize, landlords must accept service animals as they are not considered pets. For other animals, it may be advantageous to allow them into your rental. If you are smart about the open arms into your rental property.