Can animals in your rental increase your ROI instead of damaging it? Are unsupervised pets any worse than bad tenants without pets?
Increasing ROI With Pets
Are pets good for ROI? They can be an expensive value added option to your rentals. They can cause a large amount of damage to your rental property, but so can tenants without pets. However, pets are a potential income stream. If you take preventative measures you can protect yourself and your property from damage and liability.
Renters by themselves can cause damage to rental property ROI, and they can’t be done without. Renters surveyed by Zillow in 2019 stated forty six percent live with pets. Forty eight percent stated that allowing pets was a requirement of a rental property. For forty eight percent of renters, if you want their rent dollars, you’ll have to allow pets. This is how you increase ROI with pets.
Benefits of allowing pets
Your acceptance of pets means that your investment property will rent faster and have renters that renew their leases repeatedly. If a pet owner likes your property they won’t want to go looking for another property that allows pets. People should not be bringing unauthorized pets into your property. Allowing pets reduces the likelihood of unauthorized pets.
Allowing pets doesn’t mean allowing all pets. You can choose what pets are allowed, their size and type. You can control what breeds and sizes of dogs, for instance, are allowed.
Dogs may be the toughest pet to allow. They have a built in defensive mechanism that causes them to bark. Dogs can be threatening to other tenants and neighbors. Dogs can ruin carpets when they relieve themselves. They can destroy things when they need a chew toy. Having a size limit for dogs prevents damage. This also helps prevent offending neighbors. Check local laws that govern acceptable breeds of dogs. If your rental is in an HOA, don’t allow dog breeds that are forbidden by the HOA.
Well behaved dogs are less trouble, or not a problem at all. Older dogs that are accustomed to living indoors are the easiest to accept. They don’t have the energy to burn off that younger dogs do. Older dogs can handle being indoors without doing damage. The amount of training that has gone into the dog over time makes a big difference.
Cats that are house trained are close to the perfect uncaged pet in a rental. They’re usually quiet. They don’t bark at the neighbors or other tenants. Cats aren’t threatening to most neighbors or tenants. Trained cats will use a litter box and not mess on the floor. They don’t dig in the yard. However, they do shed. They can treat door trim as a scratching post. They can do the same thing to furniture in a furnished rental. Cats are relatively invisible as long as the cat box is cleaned and changed frequently, and the owner has taught them to use a scratching post.
Fish are deceiving. All fish do is swim around in an aquarium. They don’t chew on door trim. They don’t relieve themselves on the floor. Fish don’t threaten other renters or neighbors. What can fish do to damage your ROI? Big aquariums of warm water species give off a lot of water vapor. I met a rental maintenance man that had a persistent problem with water on the walls in a rental. This was during the winter. He couldn’t nail down where the water was coming from. The water vapor was coming from a 50 gallon fish tank. The vapor condensed on the walls. A couple of goldfish in a bowl isn’t bad. A mini barrier reef in the living room might be a problem.
Rodents and Ferrets
Some rodents seem to be better than others for rentals. Mice, gerbils, and hamsters seem to be less of a problem than ferrets for instance. Ferrets are not rodents. Ferrets are a mammal. However, because of their size, and shape, many confuse them for a rodent.
The problem with ferrets is what makes them so attractive. Ferrets have a ton of energy when they’re awake. They can sleep 20 hours a day. Their energy level makes them a lot of fun to play with and watch. Ferrets are smart and they like to explore. Every nook and cranny is a place to go. This includes ceiling cavities and other hard to get to places. A ferret’s odor seems to be the biggest complaint. Ferrets can be spayed or neutered and have their scent glands removed. People seem to notice the smell of ferrets even after they’ve been altered.
Reptiles can be a good rental pet. However, like dogs, one should be selective about the size and types of reptiles. There’s a big difference between a gecko and a crocodile. Reptiles don’t typically require a large, water filled aquarium. They will need an appropriate diet, and cleanliness provided by the owner. Reptiles don’t bark, and by not allowing large or dangerous reptiles there won’t be a conflict with neighbors or other tenants. You won’t be exposing yourself to liability either.
Few renters have birds. Birds that roam freely can be destructive when bored and leave droppings on walls and floors. Larger exotic birds can be especially destructive if left unsupervised for long periods outside a cage or enclosure. Make sure birds are caged when unsupervised. Some birds need things to tear apart. There are products made to fulfill this need. Don’t let your rental be their chew toy.
Pet Friendly and Damage Resistant Rentals
Set up rentals and their leases to handle pets and their mistakes. Start with flooring choices.
Carpet will have to be replaced on a regular basis, with or without pets. Replace it with a surface that’s pet proof like Luxury Vinyl Tile (LVT). It’s tough, it looks like tile or hardwood flooring and it’s relatively inexpensive considering it’s longevity.
If the increase in rent for pets pays, fence in the back yard to contain pets. This will prevent conflicts with neighbors. Fences prevent violations of city laws and home owner association requirements. Setting up a specific area for dogs to mess can be a good choice also. Cut out part of the grass in the yard. Fill it in with sand or mulch for the dog to go in. This prevents unattractive dead spots in the yard.
The End Game With Pets
Care and maintenance of the pet is the most important factor in whether or not they will work in a rental. This is no different than the tenants themselves. They either take care of themselves and their affairs, or they don’t.
Pets are a potential source of additional ROI because additional monthly rent can be charged for each pet. Collect an additional deposit for each animal to protect yourself against losses if your local laws allow for it. Some states don’t allow a separate deposit.
Separate tenant and pet deposits can be challenging according to Nolo. Nolo is a noted online DIY legal website. Nolo advises landlords to simply require a larger overall deposit and not differentiate between pet and tenant damage. It can be difficult to differentiate between tenant damage and pet damage. Tenants can be more damaging than the pets. Using separate pet and tenant deposit funds to compensate for damages can be tricky and potentially illegal.
Pets damage properties. However, search YouTube for bad tenants. You’ll see many examples of human tenants that have heavily damaged rentals. They’re potentially as bad as pets. You can’t ban people. They pay the bills. Pets can increase cashflow. More and more, if you want the tenant, you will need to allow the pet.
Pet acceptance in a rental is a requirement of 48% of renters. Pets are a companion and not a possession to more than fifty percent of single people. If you want that forty eight percent of the market you’ll have to make accommodations for pets.
To learn more about how Jacob Grant can improve your Passive ROI call 208-795-8218 or schedule a call Schedule call