Whether they live in a mansion, single-family home or apartment, it’s no secret that pets bring great joy and happiness to their owners. And when a pet owner is happy in their residence, they’re more likely to remain in that residence for a long time. It also turns out that a majority of U.S residents in their 30s, who constitute a large portion of the rental pool, own at least one pet. A whopping 75% of people in their 30s own a dog, while more than half own a cat, according to a recent study by Zumper.com.
Since a significant portion of the rental pool owns at least one pet, property owners who restrict pets at their properties are losing out on significant rental income in the form of shorter-term leases, lower rents, vacancy issues and pet deposits.
Doug Brien, CEO and Co-Founder of Mynd Property Management, says that allowing pets in your rental property is “a no-brainer. It’s simply about setting up a policy that protects you as an owner.”
Pet insurance, pet deposits and higher-priced pet deposits are examples of how owners can keep their rental investments safe, sound and protected. “That’s the bottom line. As an investor, you have to be data-driven. People have long-held opinions about allowing pets in their properties, but I urge them to make data-driven decisions, not emotional ones. There’s a way to allow pets in your property, while limiting your downside,” Brien shares.
1. Most Residents Own Pets
Landlords need to understand that 80 percent of residents in the United States have at least one pet. That means they want to move in with a hamster, gerbil, fish, cat, or dog.
When they’re searching online for rental properties, the search engine results are only going to deliver the properties that don’t limit pets. So, when you advertise no pets at your property, you won’t be able to access that 80 percent of the potential resident pool.
We recommend you allow pets on a case-by-case basis. Then, when you have people applying for your home, you can also screen the pets and decide whether you will accept the animal. You don’t want to lose 80 percent of the tenant population by saying no pets allowed.
2. Pet Owners Generally Sign Longer-Term Leases
The Foundation for Interdisciplinary Research and Education Promoting Animal Welfare created a study showing how having pets in rental properties impacts both residents and owners. According to the data collected by the nonprofit organization, residents remained in pet-friendly units for nearly four years on average, while residents of properties that restrict pets stayed for only 18 months.
3. Most Pet Owners are Great Residents
Statistically speaking, pet owners are good residents. Animals actually do a lot less damage than people when they’re living in a property. You probably know some people who take better care of their pets than their children.
When you have strict policies on how pets have to be handled and treated and you collect a pet deposit or a pet fee, you can count on your residents taking good care of your pet and your property. Put some parameters in place to protect the property, and be clear about your standards and procedures. You’ll find you’ll have better residents taking better care of your property because they know not everyone rents to pets. Not to mention, considering service and support animals, which are legally allowed in rental properties and what you will need to consider on this front.
4. Pets Equal Higher Occupancy Levels
Limiting vacancies is often challenging for property owners, especially if they are handling leasing themselves. Allowing pets in your rental property is a great way to boost demand and limit those vacancies. According to FIREPAW, pet-friendly rentals have much lower vacancy rates–10% on average. Meanwhile, vacancies for properties that restrict pets are 400 basis points higher at 14%. That discrepancy represents a significant loss of rental income per month.
You can also earn more money when you rent out a pet-friendly property. Landlords can charge a pet deposit or a pet security fee. Pet rent can be charged every month and you can charge a pet administration fee.
Based on the FIREPAW report, pet-friendly owners are able to charge higher rents. The rent premium found was between 20% and 30% of the average rent. For example, using resident data, pet-friendly owners charged $222 more on average than owners with a policy of not accepting pets. These rental rate findings were based on an apartment that rents for $1,070 a month.
6. Pet Deposits and Total Deposits Are Larger for Pet-Friendly Rentals
On average, pet-friendly rental housing owners charge a separate pet deposit. The average pet deposit was between 40% and 85% of the total monthly rent. “In general, it should be noted that in addition to a separate pet deposit, the average total deposit was larger for pet-friendly housing,” according to FIREPAW.
Even when limiting the type or size of a pet in a residence, you limit your ability to maximize your rents. Rentals with a limited pet policy commanded lower rents than non-restrictive pet-friendly housing.
How to Protect Your Investment If You Allow Pets
While there is tremendous upside to leasing your property to a pet owner, there can also be some downside to consider. The main concerns among property owners are two-fold: Pets could cause damage to their rental property and dangerous breeds could present a health and safety issue to residents. Both statements are true, but there are steps you can take as an owner to completely mitigate those concerns.
“Technology is a great start when it comes to protecting your rental investment,” explains Brien. “There are all kinds of data-driven tools and websites that you can utilize to get a pet screened.” PetScreening.com, for instance, helps property managers screen pets, and it helps residents track records on their pets. Another way to protect your investment is to consult with an experienced property manager in your area.
A good property manager understands which pet breeds are considered dangerous and could cause potential damage to your rental. A property manager will also provide you with an idea of how much more rent you can command per month if you allow pets. For more information about the benefits of allowing pets in your rental property, contact us today.