There are certainly pros and cons to allowing pets in your rental properties. If you do allow them, it’s wise to charge renters for the privilege since the possibility of damages becomes greater when pets are introduced. But which is best between pet fees, pet deposits, and pet rent, and what should you charge?
Whether you choose to allow pets or not is totally up to you—with the exception of service or companion animals (you must allow those).
Pets could damage your property, and they could become nuisances to neighbors. But you can probably charge more for your rental property if you allow them.
Plus, by allowing pets, you’ll have more potential renters interested in your place…a lot more: about half of all renters have a pet and about 35 percent more would have a pet if they could. Renters with pets also tend to stay longer: 46 months on average instead of 18 months, according to a survey conducted by FIREPAW, Inc.
If you don’t allow pets, there’s always the chance that your renters will sneak them in anyway.
If you want to allow pets but aren’t comfortable with certain kinds, you can restrict the types of pets you allow. You might allow only cats and small dogs under 25 pounds, for example. You can also restrict the number of pets you allow, such as no more than two pets.
The most popular pets in 2018, according to the American Pet Products Association were the following (in order):
- Freshwater fish
- Small animals
- Saltwater fish
If you do allow pets, you’ll probably wonder whether you should charge a pet deposit, pet fee, or pet rent and what the differences are.
Good questions! Here is what you should know about pet deposits, fees, and rent.
Pet deposits and pet fees
The difference between pet deposits and pet fees is that pet deposits are refundable and pet fees aren’t. Some people, however, like to say the pet deposit is non-refundable, which would then make the pet deposit the same as a pet fee.
States vary on whether you can even charge pet deposits or pet fees—so please do check your state laws. If you’re in a state that doesn’t allow this, or if you’re renting to someone in any state with a service or companion animal, charging a pet deposit or pet fee is off the table (seriously)!
But if you’re in a state that allows pet deposits and pet fees, you have some decisions to make. Your state’s law might also dictate how much you charge; however, charging somewhere between $200 and $500 for a one-time pet fee is pretty typical.
If you charge a pet fee, you keep that money whether there’s pet damage or not. A pet fee is simply the one-time admission price to have a pet in the rental. It doesn’t typically cover any damages the pet might cause.
If you charge a refundable pet deposit, you need to return it if there’s no pet damage when the renter moves out. If there is damage, you need to send your renter an itemized list of how much you spent to repair the pet damage, which justifies keeping all or part of the pet deposit—just as you do for a security deposit.
What about pet rent?
Pet rent is a different story. Many property managers and landlords charge a recurring monthly pet rent in the amount of $50 to $100.
It is simply an additional amount of money added to the regular rent, and this practice is becoming more popular. The amount of pet rent could vary based on the number and type of pets allowed.
By only charging pet rent (in lieu of a pet deposit or fee), you can significantly increase your monthly revenue.
Should I charge a fee?
The security deposit brings up the question of whether you should even charge a pet deposit or pet fee at all. After all, you can use the security deposit to cover damages a pet causes if you don’t charge a pet deposit or pet fee.
In some states, if you do charge a pet deposit or pet fee, you can’t use the security deposit to cover pet damage. You use the pet deposit or pet fee for that.
Given that the security deposit is generally more than the pet deposit or pet fee, you’re limiting yourself if there is major pet damage. So, many landlords don’t ever charge a pet deposit, even if they can. They just lump it all together into a simple “security deposit,” which is also easier to explain.
What should I charge?
Landlords have a lot of options when it comes to fees and pets; they could mix and match any of the following:
- Regular rent
- Security deposit
- One-time pet fee
- Recurring pet rent
- Pet security deposit
While some renters might complain about extra pet rent, pet deposits, or pet fees, many renters are just happy to find a place for their furry, feathered, or scaly friends.
But just because a landlord could charge a plethora of pet fees, doesn’t mean they should. Here’s what we recommend:
Suggested pet fee structure:
- Regular rent—market rate
- Security deposit—equal to one to two months’ rent
- Recurring pet rent—$50 a month
Why not a one-time pet fee?
We don’t suggest charging a one-time pet fee on move-in simply because it creates an additional financial hurdle for a renter. When moving from one rental to the next, money can be tight, usually because the renter has to come up with a security deposit and possibly pay for some overlapping rent. If you add in an extra pet fee, you’ll eliminate some otherwise good renters.
Why not a separate pet deposit?
As emphasized above, if you charge a pet deposit, you might be limiting yourself if the damages exceed the deposit amount. It’s better to simply charge a single deposit for all damages—regardless of who (or what) caused them.
By allowing pets, you’re preventing many animals from ending up in shelters—and you’ll have a larger population of renters to choose from.
Whether you choose to charge a pet deposit, pet fee, pet rent, or nothing extra at all, by allowing your renters to have pets, you’re establishing a better landlord-renter relationship and are increasing your chances of success.