Allowing pets in your rental unit is a risk many property managers are hesitant to take. They have the potential to be quite destructive: soiling carpets, chewing on various surfaces, scratching doors or walls, and burrowing. While this risk is definitely there, allowing pets also introduces a new revenue stream that can make a big difference to your rental cash flow. Also, because your property will now be on the (shorter) pet-friendly list, these groups will look for you specifically. In this article, I’d like to discuss some of the common income streams that might make it worth the risk.
pet fee
A pet fee is an amount payable at lease signing that compensates the owner for allowing a specific animal to occupy the residence. Knowing that an animal will cause additional wear and tear on the property, this charge covers this depreciation effect. Note that I called it a fee, and not a deposit. It must be made clear to the prospective tenant that this amount is non-refundable like a deposit would be. An average initial fee is $200, but it can vary more or less depending on the size of the residence and the breed in question. It is not common for larger dogs to carry a higher fee.
pet rental
In addition to the fee listed above, it is common to charge rent in addition to the base rate each month for allowing the pet. Monthly surcharges range from $5 to $25. Again, this amount is entirely up to what you are comfortable charging.
Security Deposit Coverage
Just like renting to a pet-free tenant, the security deposit covers the cost of repairing any damage caused while the unit is occupied. If the unit shows signs of abuse or aging beyond “normal wear and tear”, you have every right to take the cost of this repair out of your security deposit fund. In most cases, one month’s rent is collected at lease signing and is retained for up to 30 days after the tenant vacates the property.
minimize risk
So if this extra income and security makes you comfortable with the idea of allowing pets, what else can you do to minimize the risk? First, you can place restrictions on breed types and/or weight of the animal. Pet-friendly rentals often list “no aggressive breeds” or dogs under 50 pounds, ensuring you won’t have as big a liability. Another recommendation is to be thorough with your tenant screening, making sure to ask the previous owner about any damage caused by the owner or the pet. This alone goes a long way in understanding who you would be renting to.
With the risks understood, allowing pets in your rental unit can generate hundreds of dollars of additional revenue. Practicing due diligence in tenant selection and restricting breeds is the best way to minimize the risk involved and ensure that any extra money you raise is kept as profit rather than spent on repairs.