How to Lose Half of Your Tenant Prospects or Expand Your Pool by 100%

 

Question: Are you always so flush with rental prospects that you can exclude half?

Anticipating that your answer is in the negative, let’s talk about how the half who are pet-owners may impact your success as a landlord.

Nearly half of renters currently own pets, according to New York property investor Erin Eberlin.

“Therefore, if you make your property pet friendly,” she explains, “you can be more selective when choosing a tenant as you will have a larger group to choose from.”

Residential rental housing is a business. What business owner, entrepreneur or investor would seek to reject 50% of potential customers … sight unseen? However, that is often the case with landlords when it comes to deciding whether the rental unit is to be pet-friendly or “no pet owners need apply”.

In this article, we’ll make the case for the pet-friendly option as the preferred alternative. That position is not one to accept lightly. It must be based on a sound foundation of terms, conditions and pricing.

Market Differentiation

Universally, landlords agree that the unique selling proposition for a rental property is not that yours is “better” … because no rental unit is better in every respect, all the time. How the property is distinctive and exceptional and specific to their needs are the criteria prospective tenants consider when making a renting decision.

So, a pet-friendly marketing plan is a powerful way to drive enhanced demand by responsible pet owners.

In support of the advantages of being a pet-friendly landlord, consider this assessment by the Humane Society.

Did you know that 72% of renters have pets, yet problems finding and keeping rental housing is a leading reason dogs and cats wind up in shelters?

This fact has three important elements as it relates to market differentiation. First, the obvious being the difficulty of many pet owners to secure desirable rental housing. Second, the likelihood is that pet-owners will typically stay longer because it is so difficult to find pet-friendly alternatives. Plus, they are more receptive to a security deposit increase and/or higher rent.

Want your property to stand out from the rest? Target pet-owners in advertising and promotion of your rental.  Showcase it as an exceptional property feature. Is your property near a dog park or an attractive area to walk dogs … flaunt it!

The Landlord Fear Factors

Your non-pet owner risks as a landlord are readily apparent – non-payment of rent and property damage, just to name two of the more common and expensive. That said, let’s take a look at

additional risks a landlord inherits when adopting a pet friendly rental posture. We’ll follow that with risk-easing approaches through carefully crafted terms, conditions and pricing.

Pet-induced Property Damage: The most common is probably damage to carpets requiring replacement costs due to staining and excessive wear and tear by pets. In addition, reports of damage by landlords include chewed vinyl flooring, gnawed corners of cabinets, clawed window screens and scratched hardwood floors. Less common, but present nonetheless, is pest infestations of fleas and/or ticks.

The Humane Society cites, “Research shows that most pets do not cause any more damage to rental units than the average renter.” Certainly consider the source, but it sort of rings true if controls and penalties are in place to motivate responsible pet owner tenant behavior.

Pet-induced Tenant Complaints: Barking dogs, screeching cats and squawking birds may pose a threat to the tranquility of your other tenants or neighbors. Additionally, tenants with allergies aggravated by certain animals and the potential for pet odors are on the list as well.

Pet-induced Injuries: Dog bites immediately come to mind. Also, bites or scratches by cats or the potential for being startled by unanticipated contact with more exotic pets such as reptiles may result in injury.

                 

 

Mitigating Risks Through Terms, Conditions and Pricing

Pet Agreement: Once you have decided to offer pet-friendly rentals, reduce your risks with a “pet agreement” as part of the lease. As an integral part of the signed agreement, all renters will be required to accept notice that their continued residence as tenants is dependent on honoring all terms of the lease – including provisions of the pet agreement.

Your primary focus is to shift as much responsibility to the tenant as possible.

Since all tenants are required to accept the pet agreement, renters that are current non-pet owners will already know the rules and what is expected if a pet is acquired. Non-compliance will be considered breach of contract with attendant consequences.

KRS Holdings includes a provision in its leases that if a pet is kept on the premises and not so disclosed, the tenant will incur a $500 penalty.

Pet Agreement Provisions: Certainly, consult legal counsel to craft acceptable language. Here are a few suggested categories of items to include.

  • Specifically identify the types of pets allowed and how many of each. For example, you may permit dogs, cats, fish, caged mammals and birds, but not snakes.
  • You may ban dogs of certain breeds deemed to be dangerous with an inclination toward violence. Be sure to check with your liability insurer to see what breeds may be excluded from coverage.
  • Another thought is to ban dogs based on height and weight. A dog that weighs no more than 35 pounds with a height not to exceed 16 inches is not likely to be one of the suspect breeds.
  • Exclude a tenant’s right to care for other people’s pets in the rental unit.
  • Require dogs and cats to wear collars with proof that all vaccinations and licenses are current.
  • Include provisions that ensure tenants’ taking responsibility for their pets. That means appropriate restraints (leashes and cages); not to leave pets unsupervised for unreasonable periods; and to clean up after their pets within the residence and in all common areas.
  • Require pet-owner tenants to carry renters’ liability insurance to protect against pet injuries to other tenants or guests.
  • Reserve the right to make changes to the agreement with appropriate notice to tenants, e.g. 30 days or more.
  • Violations of the pet agreement may result in removal of the pet or tenancy termination.
  • Consider requiring a refundable pet deposit. If you do, make it a significant enough amount to motivate the tenant to keep their pet under control and thereby get their money back.

In-person Assessment: Require your approval for any pet a tenant wishes to keep on the rental premises. Ideally, personally visit the pet to ascertain how the animal interacts with the tenant as well as yourself. At the very least, ask questions such as:

  • Type of pet (if dog: breed, size, weight)
  • Age of the pet
  • Any history of biting/attacking humans or animals
  • Past damage to property
  • Care for the pet in the tenant’s absence.
  • Proof of current licenses and inoculations.

Disabled Persons and Service Animals

Animals needed to accommodate a disability or for the individual’s well-being are not considered pets and may not be excluded under a no-pet policy, nor may an additional pet deposit be charged. Click here for fair housing laws that address this issue.

                

Summary

In this article, our intent is to make the case for the pet-friendly option as the preferred alternative when based on a sound foundation of terms, conditions and pricing. Have we succeeded to your satisfaction?

Consider the above discussion. Then do what old Ben Franklin is purported to do when facing a critical decision. He would draw a large T on a blank piece of paper with a + sign on the left column and a – sign on the right. He would then list and enumerate the pluses and minuses to arrive at a reasoned conclusion. Try it!

 

 


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