One of the interesting discussions I have with property owners is about pets and whether they should accept them. It is a hot topic, so I thought I would lay out the pros and cons and some of the things you can do to offset the potential risk of accepting pets.
60% of Americans Own Pets!
To start you need to understand that about 60% of Americans have pets. If you decide not to accept pets, you are eliminating almost two-thirds of the population as potential tenants. Also, if you have a high-end single-family home that number may be as high as 70% to 75% of families are going to have pets.
If you own lower end properties or student housing that percentage might be lower. But either way, if you do not accept pets, a large chunk of the population is not eligible to rent your property.
Pet Owners Tend to Stay in Apartments Longer!
Pet owners tend to be very good tenants in that they tend to stay longer. Because it's difficult for a pet owner to move or find another place that accepts pets, they are going to stay at their current property much longer. Obviously, that helps with turnover and with repair costs so it's better to have longer term tenants.
Pet Owners Tend to Make More Money and Make Better Tenants
Pet owners tend to make more money than non-pet owner tenants. Because owners of pets have to pay for food, vet bills, and all the other pet-related items pet owners buy, it indicates a higher disposable income than non-pet owners. Higher incomes should allow them to afford higher rents and be able to offset any short term financial trouble.
Charge Extra Rent and Security Deposit
You should make more money with accepting pets. We charge an extra $25 per month, per pet. If the tenants have two pets, then we would charge an extra $50 per month of rental income. We also charge an extra $300 per pet in refundable security deposit. It is refundable if the place is perfect when the tenants moves out, but if pet does any damage then we have additional monies to be used to make repairs. Also, if the carpets were not clean when they left, one of the things we will be using the $300 security money for is to clean and shampoo the carpets.
Use Pet Addendums to Lay out the Pet Rules and Regulations!
We recommend that you should have the tenants sign a full pet addendum. The pet addendum lays out all the rules and regulations of owning a pet and the ramifications if they don't take care of that pet.
Do Not Accept Aggressive Dogs
We do not accept any aggressive dogs. If tenants own a Pit bull or other aggressive dogs such as Rottweilers, Chow Chows, Doberman Pinscher and others, we would not recommend accepting them. Additionally, I would not accept dogs that are over 50 or 60 pounds as they are adding a lot of additional risk for your building and other tenants or neighbors. One of the reasons for this is most property insurance companies will void your insurance if you accept aggressive or large dogs.
Professionally Shampoo Carpets Once the Tenants Move Out!
We require that pet owner tenants must professionally shampoo the carpets when they leave. They must pay for the cleaning and provide us a receipt proving the cleaning was done. If for some reason they were not to do it, then again as I mentioned earlier, we'd use that extra $300 in security to have the carpets professionally shampooed and cleaned.
Hard Wood Floors and Pets?
One major concern is hardwood floors. If you have a property with hardwood floors, accepting pets is a real risk factor. We do recommend mitigating the risk by requiring that they have rugs over some or all the hardwood floors. But either way, if you have hardwood floors, it is an extra risk and make sure it is worth having a dog in the property with hardwood floors.
Service Animals are NOT Pets!
It is very important that everybody understands that a service animal is not a pet. If you decide to not accept pets, that's fine. But if the tenant has a service animal you cannot decline a tenant based on a service animal. So just make sure you're aware that has a service animal is not considered a pet.
If you are a real estate investor or property owner and want to learn more about how we can help you buy investment properties and our property management program please go to our website at http://www.delvalproperty.com/.
Mike Lautensack is the owner of Del Val Realty & Property Management ("Del Val”). Del Val is a FULL SERVICE Philadelphia Property Management company with over 15 years' experience and manage over 3,000 single family homes, HOA units and multifamily properties in and around Philadelphia, PA. We advise property owners how to build wealth and financial security through hassle-free ownership of rental real estate with our NO "Hassle" FULL Service Management Program. This proven management system allows owners to enjoy the financial benefits of cash flow, tax savings, and wealth creation. All this while it GUARANTEES you will never have to deal with maintenance or tenant issues. Please see our website for more information at http://www.delvalproperty.com/