Did you know that 65% of Americans have pets?
This is according to the American Pet Products Association. This signifies that by allowing pets in your Denver property, your tenant pool is much larger and you have a better chance of selecting a great tenant.
Some landlords don’t allow pets in their rentals to minimize the chances of property damage, noise complaints, tenant conflicts, and insurance problems.
Continue reading to find out about the benefits of allowing pets, and the differences between pet deposits, fees, and rent.
Benefits of Pet-Friendly Rentals
Increased tenant pool
Today, tenants still face challenges when it comes to finding a pet-friendly home.
By allowing pets in your property, you have the opportunity to expand the pool of prospective tenants and therefore increase your chances of finding the best quality renters.
Some surveys have shown that the rent premium for pet-friendly rentals is between 20% and 30% more than the average rent.
These types of rentals tend to generate more rental income because of pet fees, deposits, and rent.
Decreased tenant turnover
Another advantage for landlords who allow pets at their properties is a decrease in tenant turnover.
It has been shown that tenants with pets were found to stay significantly longer and were more responsible compared to those without pets.
Pet Deposits and Pet Fees
The biggest difference is that pet fees are non-refundable while pet deposits are refundable.
In Denver, Colorado you’re allowed to charge both of these fees, as long as the animal is not a service dog.
The pet deposit and pet fee are usually between $200 and $500.
What Is a Pet Fee?
The pet fee is an admission fee that the landlord gives to the tenant so they can bring their pet into the property. This entrance fee is a one-time payment, doesn’t cover any pet damages, and is non-refundable.
What Is a Pet Deposit?
Similar to a security deposit, the pet deposit works in the same way. If upon the move-out inspection it’s found that there is no pet damage, the pet deposit will be returned in full.
If, however, there’s discovered to be pet damage, you will need to send your tenant an itemized list of the repairs needed to repair the damage. Similarly to how a security deposit works, you will need to justify how much of the pet deposit is to be returned based on the repair expenses incurred.
Pets inevitably do cause damage and you’re exposing yourself to avoidable costs if your property gets damaged by one of them.
Some landlords build-in the pet deposits in the security deposit and charge a higher rental fee.
What Is Pet Rent?
Likewise to a tenant paying rent to stay in the property, if they have a pet, they are required to pay its rent. This amount will depend on the number and types of pets allowed.
This means that an additional amount of money is added to the rent and thus increases your monthly revenue. Landlords find this option much more appealing than a pet rent or deposit because they can expect a higher income every month.
Do I charge a fee?
If you decide not to charge a pet deposit or pet fee, you can use the security deposit to pay for damages caused by a pet. However, in Denver, since you’re allowed to charge pet deposits and fees, you aren’t permitted to use the security deposit to pay for pet damages.
What Is Renters Insurance?
By getting renters insurance, it covers for pet damages. The tenants can use this to pay for the cleaning and repairs needed.
Additionally, you can add an extra charge to their monthly rent. This amount can be $10 or more and some landlords also charge this per animal.
The Bottom Line
You have to consider what’s manageable for prospective tenants in Denver and what seems fair as you’re establishing your pet deposit fee. A reasonable fee can even differ in particular neighborhoods.
You need to find a good balance between not charging too much, losing potential tenants, and charging too little, not protecting yourself and your property from damage caused by their pets.
Minimize the risk of allowing pets by establishing clear expectations about acceptable animal behavior in your rental property. You can do so by having a clear pet policy outlined in your lease agreement.
Having a clear pet policy, outlined in your lease agreement, will help minimize risk and establish clear expectations about acceptable animal behavior in your rental property. Ensure that you have a good pet policy in place to provide the basis for charging more rent and collecting the other fees.
By opening up your Denver property to pet owners, you’ll get a bigger pool of potential applicants. For this reason, it’s even more important to screen your tenants and their pets. Include a pet screening process and require applicants to submit records, certificates, references, and renters insurance with pet coverage.
While it will always be the owner’s final say to allow pets at their rental property, the possibilities for additional rent and increased occupancy make pet-friendly properties a worthwhile option that every landlord should consider.