Property Management Pros and Cons of Owning Pet-Friendly Rental Properties by Callie McGill October 26, 2019March 4, 2020 by Callie McGill October 26, 2019March 4, 2020 Dogs may have been named, “man’s best friend” in the 1700s, but that doesn’t make them a best friend of property managers. For landlords and owners of rental properties, dogs, cats, ferrets, and other companion animals can mean mess, noise, complaints, and added costs. Property managers considering whether to have a pet-friendly rental property can’t make an informed decision without fully understanding both the pros and cons of allowing pets. They also need to know what steps they (and their tenants) can take to limit the potential liabilities if they decide to allow them. The Pros of Allowing Pets in Your Rental Units Even if you are firmly against having pets on your rental property, it’s hard to ignore some of the positive aspects of having a pet-friendly property. These include: Having a larger pool of potential renters. It’s estimated that 67% of U.S. households have pets, making it easy to see how allowing pets increases your number of potential renters. This also means you’re likely to have lower vacancy rates, which increases your potential profits. Charging higher rents and fees. Pet-friendly units can rent for as much as 11.6% more than units that don’t allow pets. Pet-friendly property managers can also collect security deposits for pets and get nonrefundable pet deposits. While some of those deposits will go to repairing damages, there will also be deposits paid for pets that cause no damage at all. Lastly, pet-friendly properties have lower advertising costs, which can increase overall profits. Lower tenant turnover. Allowing pets can mean keeping tenants longer, especially in areas where pet-friendly units are hard to find. It also means that a pet-less tenant who later decides to add a furry friend to the household can stay instead of needing to find a new place to live. More transparency. You may tell your tenants that there are no pets allowed in their units, but that doesn’t mean your renters will follow your rules. Renters have been known to sneak pets into pet-free units. When they do, the property manager might miss out on getting the added rent and security deposit that a pet-friendly property manager would get. The Cons of Offering Pet-Friendly Apartments No matter how much of a pet lover a property manager is, they have to consider the potential downsides of allowing tenants to have pets. These include: Damage to the rental units. Pets may not set out to ruin carpets, doors, blinds, and other unit fixtures, but often, that’s what happens. Pet-friendly property managers generally collect extra rent, pet deposits, and security deposits to help mitigate the costs of this damage. The cost of repairs and the time it takes to make a damaged unit habitable, however, could exceed the security deposit collected. Neighbor complaints. Not everyone loves the sound of a barking dog in the dead of night. There’s no way to tell if a potential renter’s pet will be noisy enough to elicit complaints from tenants in neighboring units. Also, it’s not just noise that could prompt neighbor complaints. Pets can also bring fleas and odors to the rental property that neighbors don’t appreciate. Added insurance costs. Allowing pets in rental units can increase a property manager’s potential liabilities. It’s even possible that a landlord could be liable for the damages after a tenant’s dog bites someone. With an average dog-bite cost of $35,000, that’s not something to leave to chance. Property managers who allow pets in their investment properties and get added liability coverage could be facing higher insurance premiums. Reducing Liabilities in Pet-Friendly Properties Property managers who decide to make their rentals pet-friendly can take steps to reduce the potential risks animals bring. These include: Creating a pet policy. It helps to make sure tenants know what their limits and expectations are, should they have a pet or get one in the future. These terms can be spelled out in the tenant’s pet agreement and can include rules like: Requiring proof of annual shots Restricting pet sizes Having all pets spayed or neutered Allowing only inside cats Ensuring that dogs are not left unattended outside Requiring leashes in all common areas Limiting the number of pets in each unit Policies for cleaning up after pets Requiring renters insurance (this will help cover legal risk in case your pet causes injuries or property damage to other people) Check your insurance policy. Make sure that your landlord insurance policy has coverage for pet-related liabilities. Also, find out if there are any animal or breed exclusions in the policy. In many cases, breeds such as pit bulls and rottweilers may be excluded from coverage unless you get a special policy. Check tenant references. Before allowing a tenant with a pet to move in, check with their prior landlord to make sure that they are a responsible pet owner. Ensure that every lease has a pet agreement. When a pet agreement is part of the lease, it ensures that the terms still bind tenants who don’t move in with pets if they get a pet later. Make your units pet-proof. If you decide to have a pet-friendly rental property, avoid features like carpeting, expensive wallpaper, wainscoting, and other easily damaged design features. Instead, focus on durable, easy-to-clean fixtures that can stand up to stains, smells, and the wear-and-tear of tiny toenails. Having a pet-friendly unit can be a benefit to both property managers and tenants. To get the most out of the arrangement, property managers should clearly understand the potential risks involved and take appropriate measures to protect themselves and their rental properties against them. This article has been contributed by Callie McGill. Start Your Investment Property Search! START FREE TRIAL Guest BlogsInsuranceTenants 0 FacebookTwitterGoogle +PinterestLinkedin Callie McGill Callie is a marketer in NYC, currently working to help empower people to make their best financial decisions. 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