True story: At a real estate event last week, one of the panelists (a real estate developer) said, "When I was in my thirties, everyone was getting married and having babies. Today, Millennials are getting pets!"
It's true--and it's not just Millennials who have pets: An estimated 65% of American households have at least one pet.
However, most landlords, property managers, and homeowners associations give pause to residents with pets. Some consider pets to be a liability--and in some cases, that may be true. However, there are also tremendous benefits to offering pet-friendly housing.
Here's our rundown of things to consider if you're wondering whether you should allow pets in your community.
Consideration #1: Allowing Pets Can Attract More Residents
Pet-friendly properties can help you to attract more prospective residents. Many of the new buildings coming online are designed with animal owners in mind. They offer dog wash stations, enclosed dog parks, and even doggy daycare. You don't have to go to such extreme lengths at your property--just allowing pets will draw a larger pool of prospects.
Consideration #2: Allowing Pets Can Bring in Additional Revenue
Some animal lovers are willing to pay more to live in a pet-friendly property. There's no doubt that animals cause additional wear and tear on units. You can account for that by charging animal owners a slight premium (e.g., $50 more per month). In markets where pet-friendly properties are hard to come by, many pet owners would gladly pay a premium to keep Fido by their side.
Consideration #3: Allowing Pets Can Help You to Retain Residents
People with pets might be inclined to stay longer. Because pet-friendly units are often hard to come by, people with pets might think twice before moving. Others may hold off on moving if they feel that doing so would disrupt their pet's routine. Lower turnover = less time spent marketing units, more consistent cash flow, and an overall higher return on your investment.
Consideration #4: Allowing Pets Can Attract More Responsible Residents
Animal owners are often more stable tenants. Taking care of an animal is no easy task! It requires a person to be at least marginally responsible. If they're responsible enough to take care of their pets, they'll probably be responsible enough to care for your unit, pay rent on time, and give adequate notice if they decide to move.
Consideration #5: Some Insurance Policies Place Restrictions on Pets
Check with your insurance company before allowing pets. Some insurance policies specifically prohibit animals (or animals over a certain size) from living on the property. If you decide that you do want to allow pets, you'll want to be sure to adjust your insurance policy accordingly. Some insurance policies charge more for (or ban) specific breeds of pets, so be sure to look at that, too. Otherwise, if one of the resident's animals were to cause harm--to another resident, another pet, or the property--you could be on the hook for costly damages.
Consideration #6: Meet Pets Before You Allow Them to Move In
Consider "interviewing" the pet. This may sound crazy, but hear us out. Just as you screen residents, you should also screen pets. Start by asking a prospective resident about their pet. How long have they had the pet? Where did they get them? How old are they? Has the pet ever done damage to a person or property? Who will care for the pet? Do they have proper vaccinations and licenses? This will give you the baseline detail about the pet situation. Then, take it a step further by asking to meet the pet. You'll generally be able to get a sense of the animal's demeanor within the first few minutes; so "interviewing" the pet will help you to determine whether that animal will be a good fit for your property.
Consideration #7: Make Your Pet Policy Clear in Your Lease
Be sure that your pet policy is detailed in your lease. Whether you decide to allow pets or not, your lease agreement should make your restrictions and expectations clear. Specify whether pets are allowed, and if so, the type and number of pets allowed. If certain breeds are banned (e.g. those defined as "dangerous breeds"), say so. You might also include restrictions on the size or weight of pets allowed. Don't forget to include language as to whether visitors are allowed to bring their pets, and if so, under which conditions.
The lease should go on to define the responsibilities of the pet owner. For instance, you might stipulate that all dogs are required to be on a leash when outside the unit. Maybe you ban animals from specific areas, like the pool or the clubhouse.
Finally, you'll want to outline a procedure in the event that an animal becomes a nuisance. The last thing that you want is to lose other great tenants because of a dog that barks at all hours of the night! Include language in your lease that states your warning and/or penalty system in the unfortunate case that a pet becomes a problem to others.
Consideration #8: Use Security Deposits to Offset Property Damage
Security deposits can insulate you from damages caused to your property by pets. We generally encourage landlords, property managers, and HOAs to charge the maximum security deposit allowed by state law. This is especially true if you're going to allow people to have pets. Some states allow landlords to charge an additional "pet deposit," which, on average, ranges from 40 to 80 percent of the monthly rent. Part or all of that deposit may be refundable, depending on your local laws. These deposits can be held to cover any routine or accidental damages cause by someone's four-legged friend.
Consideration #9: Should You Require Renter's Insurance?
Your homeowner, landlord, or business insurance policy should cover you for damage caused by pets--but just in case, you can also require tenants to have renter's insurance. Renter's insurance won't cover damage to the premises caused by pets. Instead, it protects the renter in the event that the animal bites or otherwise injures someone. If this were to happen, both you and the tenant would likely be named in a lawsuit, and renter's insurance will ensure that the renter has at least some basic coverage for his or her defense.
Consideration #10: Pet-Friendly Units Can Take Longer to Refesh
Even the most well-behaved pets can cause substantial wear and tear to units. As a result, pet-friendly units can take longer to make rent-ready. For example, I purchased an apartment once where a police officer had lived with his K-9 dog. The dog was lovely, but it wasn't until after he moved out that I started to notice all of the small wear and tear--which, in aggregate, took a lot of effort to repair. There were small scratches on the doors, a few bite marks on window sills, and I think it took two years before the last of the dog hair was completely out of the HVAC system! And I consider myself lucky: Animals can also bring smells that can be tough to get out. So if you're planning to allow pets, just build in enough time to make units rent-ready before releasing down the line.
Landlords, property managers, and HOAs already have a lot to consider. Adding pets into the mix can seem like an unnecessary complication. In our experience, however, pets can be a wonderful addition to your property!
If you're struggling to create or enforce a pet policy, consider hiring a property manager. An experienced property manager will be well-versed in how to handle furry friends of all shapes and sizes. When you're ready to search for a property manager in your area, Halby will be here to help.
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