Welcome to Part 1 of “Making More Money,” our series on how entrepreneurial property managers can earn more revenue from their properties or the buildings they manage for their clients. These moneymaking opportunities involve time, effort, and in some cases, funds, so research your market before starting any of the projects and following any of the recommendations in this series.
People adore their pets. Even if you’re not an animal lover, you know people who would sooner live in their cars than move into a home where Fido is unwelcome. The numbers tell the story: Americans spent nearly $60 billion on their pets in 2014. Yet in many cities, towns, and neighborhoods, according to online apartment listings site Trulia, few property owners rent out pet-friendly apartments and homes. Dog owners, in particular, often get the cold shoulder.
Tami Hunt, who manages several hundred rental units for a company in Boston, says owners’ fears are mostly unfounded. “In more than 25 years of managing properties, I have not run into any major issues caused by a dog,” she says. “The biggest problems I encountered were two dogs snapping at each other in the lobby, and occasionally a few scratches on a door or floor.”
While there can be risks to accepting pets, the risks of losing a great tenant who is a dog lover can outweigh them. (The same Trulia study notes that most landlords are fine with cats.) With so many people attached to their pets, letting them move in with their furry friends is a perfect way to rent a unit faster — especially in pricey urban areas where luxury high-rises and 10-figure brownstones prohibit them.
This is why, except in rare cases, the buildings Hunt manages today are dog-friendly.
Let’s take a look at some of the financial benefits you can reap from making your rental homes and apartments pet-friendly.
#1: Fill vacancies faster and keep great tenants
You can lease units much more quickly in neighborhoods where pet-friendly rental properties are in limited supply, Last says. Hunt also encourages you to tell your agents to share your pet-friendly policies with prospective tenants when showing apartments. She says, “A prospect may say, ‘Hmmm, I’ve always wanted a bulldog. Now maybe I’ll get one.’”
David Last, a property manager, developer, and the founder of Last2Development, also in Boston, agrees and offers this example: “If you have 30 units that you can lease even 10 days faster by allowing pets, that’s the equivalent of an additional 300 days of rent. Assuming the average monthly rent is $2,000 per unit, that’s about $20,000 of extra (annual) income.”*
*All monetary figures in this series are estimates based on interviews with property managers working in the 2015 Boston market. Your costs and revenue will vary based on your location, your suppliers, your contractors and subcontractors, and other factors.
#2: Charge monthly “pet rent”
For larger breeds of more than 100 pounds, like a St. Bernard or Great Dane, it’s reasonable to charge $100 per month, Last says. And you could still charge $50 per month for smaller breeds like pugs and Chihuahuas. Hunt agrees, and says that in her experience, a tenant who considers a dog part of the family is willing to pay the extra money.
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If units in comparable buildings are fetching $1,800 per month but aren’t dog-friendly, not only can you rent your units faster, but you could gross an additional $1,200 annually from just one unit by charging monthly pet rent of $100. If you manage a 10-unit building, that’s $12,000 in additional revenue.
Before you charge additional pet rent, make sure to check your local laws first.
#3: Charge a pet inspection fee
Hunt has worked at properties where management charges a $250 one-time fee to inspect the pet before the lease signing. The fee covers:
- Registering the pet with the building
- Taking the pet’s photo
- Reviewing and making copies of veterinary records that prove all necessary shots are up-to-date
- Taking a DNA sample, which can be referenced if the building’s policy of cleaning up after the pet is violated
Getting started tips
Now let’s cover a few items you’ll want to consider before you embark on making your units pet-friendly.
#1: Include the right language in the lease
Hunt says you must be explicit in the lease about what breeds and sizes of dogs are allowed and what behaviors won’t be tolerated. Usually the language will provide for evicting the pet if it becomes a nuisance. Often a barking or crying dog problem can be handled by suggesting the tenant hire a dog walker, she says.
#2: Reserve some funds for maintenance and cleanup
It’s a good rule of thumb, just in case, Last says. He also recommends thinking about pet-friendly flooring. Avoid exposing hardwood surfaces for dogs, while carpets can be a problem for clawing cats.
#3: Heed your state or local laws
In Massachusetts, for example, you can collect the following at the lease signing: first month’s rent, last month’s rent, and a security deposit equal to no more than one month’s rent. Charging a “pet deposit” above and beyond the total of three months’ rent is illegal in Massachusetts.
Pro Tip: Make your buildings smoke-free
Smoking is in decline, but millions still partake in the habit. In addition to or instead of making your building pet-friendly, consider making it smoke-free. Again, doing your research is crucial. Like pet-friendliness, the demand for smoke-free living may or may not be considered a perk in your market.
Check out the next article in our series: How to make more money from your properties by renting to college and university students, as well as other “non-traditional” tenants.Read more on Resident Management