Renting to pet owners is a great way to gain more prospects for your rental. More options allow you to have high qualifying standards without long-term vacancies.
Yet, there is a downside. Pets can damage the property. You don't want to be stuck holding the bill for that. So, how can you allow pets in your rental and remain in the black?
1. Increase the Monthly Rent
Look at your competition. How many landlords are offering pet-friendly homes? Allowing pets when your competition does not gives you a slight advantage. You can charge more rent because your rental will be in higher demand. This rent amount applies to pet owners and non-pet owners alike.
2. Pet Owners are Often Long-Term Renters
Finding a rental that allows pets is no easy task for pet owners. When they find one that fits their needs, they're more likely to renew their lease. This is good news for landlords. This means your profits don't have to take a hit due to a vacancy once the lease is up. You also don't have to invest in turning and marketing the unit for the next resident.
3. Charge a Pet Deposit
A common approach, you would charge a pet deposit just like you would a security deposit. Consider what it would cost to repair scratches on the walls and on baseboards. Also, look into potential carpet replacement and carpet cleaning. You may need to remove pet dander and waste. Once you know what that'll cost, you can come up with a feasible pet deposit amount.
4. Consider Pet Rent
This is added to the pet deposit or in lieu of the pet deposit. However, if you add a small pet rent in addition to the pet deposit, your chances of losing money on a move out decrease.
5. Require Renter's Insurance
This is recommended whether prospects have pets or not. But, it's especially beneficial if you allow pets in your rental. What if the damage exceeds the pet and security deposit? If the tenant has renter's insurance, you can go after the resident's insurance to recover the remainder of the costs.
Be sure to speak with your insurance agent about your homeowner's insurance on the rental. There may be some breed and weight restrictions in your policy. You must take those into account when allowing pets.
6. Include Pet Addendums
Requiring all residents to sign a pet addendum is another way to protect your asset. You want to have a few clauses in this addendum including:
- What happens if the animal bites another resident or neighbor? The addendum must state that the owner takes full responsibility for any medical bills from the bite.
- Require that the pet is up to date on any vaccinations.
- Rules regarding excessive noise made by the pet. The pet owner is responsible for ensuring the animal does not disrupt the neighbors. They must abide by the noise regulations in the lease.
- Rules regarding the cleanliness of the unit. If the pet goes to the bathroom on the carpet the resident must clean the mess promptly. Leaving the mess attracts pests, which is a housekeeping breach of contract.
The pet should not put an undue strain on you or the neighbors. The addendum serves as a risk management tool for your property and other tenants.
7. Offer Weight and Breed Limits
You can decrease the limit of potential damage to your unit by restricting what animals you allow. Many will place a maximum weight of 25-30 pounds for pets. This prevents large breeds that can do substantial damage to a home.
8. Openly Welcome Service and Therapy Animals
Service and therapy animals are in a different category from pets. Properties that don't allow pets must allow service and therapy animals for disabled residents. However, these animals come trained. They also live on the premises to assist their owner. Depending on the laws in your area, you may not be allowed to charge a pet deposit. But the owner is responsible for any damage the animal does. They are also required to abide by the rules in the pet addendum just like the pet owners.
Renting to pet owners can feel risky to landlords. But if you manage the risk correctly, you can profit by allowing pet owners to rent from you. It's a mutually beneficial arrangement for both parties.