Investment Properties – Should You Allow Pets in Rental Properties?

Should you allow tenants to have pets? This question is often a difficult one for investors to answer. On the one hand, they like animals but on the other they are worried about damaged screens, carpets, furniture, cat scratch marks on door frames and odour, all of which can devalue the property. Then there is the potential for the tenant having noisy pets that annoy neighbours. What to do?Property Investors need to put their business hat on to decide the answer and try to leave the emotion out of the decision. Let us take a look at some facts.In a recent Northern Territory News article was the headline, “Pet Hates Reducing Landlord’s Income”. An interview was conducted with Investment Club President, Mr Kevin Young. According to Mr Young, Australia has one of the highest pet ownership in the world with 63 percent of the population having one. Half of those who don’t have a pet say they might want to own one soon. He claimed that there has been considerable growth in one-person households over the last three decades and many of those have pets as companions. “It is a reality that pets are becoming an inescapable part of the rental property market in Australia and it is an issue that Australian landlords will have to address in the future if they want to achieve a higher rate of return from their investment property,” Mr Young said.Mr Young’s observations seem to be backed up by an article in the Courier Mail. Interestingly, the article claimed that up to 15 percent more rent can be achieved for pet rentals and that tenants with pets often want to sign longer leases. The article also noted that property managers say that up to 70 percent of their rental inquiries are from pet owners. Courier Mail, July 10, 2010The RSPCA NSW also stated that they receive numerous inquiries from concerned pet owners who are finding it very difficult to secure a pet-friendly rental property.What does a property investor want?Demand for their rental property, the best rental yield and consistent tenancy. Perhaps it really is time for a rethink.There are risk- minimization measures that can be put in place to ease your mind about letting your property out to pet owners. Ask your property manager to:Find out whether the pet owner has up to date records which prove that the pet is properly vaccinated, registered and similar.
Include conditions in the lease that fit with your comfort level, such as outside pets only or pets allowed, with the owner being responsible for any damage the pets cause. The latter is important because Landlord Insurance does not cover that kind of damage.
Include a clause which states that the tenant is responsible for having pest control for fleas undertaken at the conclusion of the tenancy. Ask for proof this has occurred.
Take particular note of things such as pet droppings in the garden that need to be cleaned up and to look out for stains on the carpet resulting from pets having accidents etc while they are conducting property inspections. This will enable issues to be quickly resolved.
Undertake a reference check on pets. Check with the previous landlords / property managers about the condition of the property, if damage occurred and how it was handled.So will you allow pets in your rental properties? There would seem to be several good financial reasons to do so.
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