As a real estate investor, you’re nearly as likely to run into households with pets as you are with families with children at home. Unless your property is age-restricted, you can’t turn away children, but landlords and property managers can use their discretion on pet policies.
The Case for Pet-Friendly Rentals
- Broader market. Almost 40 percent of the households in the U.S. have a cat or a dog. Compare that to the 47 percent of households with children in 2012. By allowing pets you may be able to select from a wider tenant pool.
- Higher rent rates. Ask your property manager to compare the monthly rents are for homes that don’t allow pets and those that do. You may find that you could increase the rate based on supply-and-demand conditions. If you don’t have a management company, check out the for rent listings in the paper, at Realtor sites online, and Craigslist to find properties similar to yours. You’ll learn the monthly rents and deposit amounts for properties based on whether or not it's a pet-friendly rental.
- Longer tenancy. Because their choices are limited, tenants with pets tend to stay put longer. As a property owner, you benefit by having low turnover, a steady income stream, no marketing costs, and reduced maintenance expenses.
- Everything is transparent. Prohibiting pets sets the stage for tenants bringing them in behind your back. They may have myriad reasons for adopting a pet, and if confronted, they may move out rather than get rid of their furry friend. Tenants who are hiding a pet may not want any kind of maintenance services in case the animal is found and reported to you or your property management company.
Of course, many investors are concerned with the additional maintenance costs that may result from a pet in the home. Here are the best ways to mitigate this risk:er
- Put the right tenants in your home and clearly explain the standards of upkeep of the home
- Collect additional pet fees or security deposits in addition to the standard security deposit
- Use materials in your home that can withstand additional wear and tear. Use upgraded paint and a hard surface such as vinyl plank flooring in the high-traffic areas of the home.
See also 4 Ways to Decrease Maintenance Costs
Over time, the additional revenue provided by being pet-friendly should outweigh the additional risk of maintenance costs if you take the simple steps to mitigate your risks. Keep in mind how expensive an additional month of vacancy costs.
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