One of the most significant decisions you will make with a new rental property is whether or not to allow pets. While some pets will cause considerable damage and hassle during the tenancy, others will be perfectly behaved and leave little to no trace once the tenants move out. However, you never know which one you'll get when a tenant moves in.
The simplest way to protect yourself is by adding a pet deposit to cover the cost of damages incurred by a pet, but this can be trickier than it seems. Before you write your pet rules and fees into a new lease, it's essential to understand all of your pet fee options.
Should I Allow Pets In My Rental?
Pets can be quite the hassle in a rental unit. Sometimes pets that are not trained may leave stains on your carpet or become aggressive with other residents and pets in the neighborhood. Other pets might scratch the walls, make loud noises at all hours of the day, or leave odors that are difficult to remove once the tenants move out. Nevertheless, these are worst-case scenarios and not characteristic of every pet.
Allowing pets in your rental has several upsides. According to an Apartments.com survey, over 70% of renters own at least one pet. Allowing pets opens up the pool of eligible and interested applicants for your rental. If you struggle to find tenants, allowing pets can help you become more attractive on the market.
It's also important to note that in the case of service and emotional support animals, landlords must allow these pets in the rental.
The Legality of Non-Refundable Pet Deposits
In most states, pet deposits differ from pet fees and must be refundable. Like traditional deposits, you must provide an itemized list of repairs incurred if you do not return a portion or the entirety of the pet deposit.
In several states, keeping a pet deposit for repairs unrelated to the pet is also illegal. In these states, the pet deposit must be used for:
- Stains from accidents inside the unit
- Ripped or stained carpet
- Scratches on the floors or walls
- Flea infestations
- Excessive odor or hair
How Much Should A Pet Deposit Cost?
According to Petfinder, the average pet deposit ranges from 40%-85% of the monthly rent. While this may seem high, this is set to cover extensive repairs, including replacement of carpet or deep cleaning of the apartment after a pet has left. If a deposit this high is required, it is typically refundable.
Although, keep in mind this price point can deter some renters. They will already have to pay a traditional deposit and potentially other application fees, so a pet deposit may not be ideal for units geared toward mid-income to lower-income rentals. In this case, you may opt for a non-refundable pet fee or pet rent instead.
Pet Fees vs. Pet Deposits'
Pet deposits work just like any other deposit – they are collected upon the lease signing and refunded at the end of the tenancy, minus any damages. However, if you're looking for a more affordable option for renters, you may opt for pet rent or non-refundable pet fees.
A non-refundable pet fee is typically collected at the beginning of the lease like a deposit but is priced slightly lower and is explicitly non-refundable. If you use the correct terminology and clarify in the lease that this fee is non-refundable, you can legally keep it regardless of the damages incurred.
Pet fees are an excellent option for affordable rental units, but like a deposit, a pet fee may deter some renters as they are already paying a traditional deposit and application fees. Your other option is to charge pet rent or a monthly fee that covers the pet for the entirety of the lease.
Pet rent can actually be quite lucrative for landlords as $50-$100 per month with a long-term tenant will add up to much more than 50% of monthly rent over time. In addition, year-to-year leases are ideal for pet rent as they make the initial costs more affordable to renters but add up to a substantial amount over the long term. Plus, you can keep all the pet rent regardless of damages at the end of the lease.
Pet rent can be charged as a flat fee or per pet on the lease. You may want to change your pet rent fees depending on the type of pet, as dogs and cats are likely to cause more trouble than hamsters or reptiles.
Some states allow you to charge both a pet deposit and pet rent, but you should check with local laws before adding both to your lease.
RentSpree can help you find the best pet-friendly tenants in your area with our tenant screening tool and can help you price your pet rent using our Rent Estimator. By allowing pets, you open your market to so many more potential renters, many of whom will be on long-term leases. To learn more about your pet options and best practices as a landlord, visit our Resource Center.