Should You Allow Pets in Your Rentals?

If you are a landlord, should you allow pets in your rentals? 57% of Canadian households own pets. Yet most Canadian landlords have strict no pet policies. Are landlords protecting their rentals from extra sources of damage or are they missing out on some of the best possible tenants? First I will explain the pros and cons of allowing pets in your rentals. Then I will explain why I actually allow pets in most of my rentals and why it helps me recruit more responsible tenants, that tend to rent for longer periods of time. I firmly believe that pet friendly units are a useful strategy that more real estate investors should employ. When properly handled it can create win-win situations for both landlords and tenants.

Pros

1. You can charge a higher rent. Pet friendly rentals are hard to find, despite the fact that the majority of households’ own pets. This means there is a higher demand and lower supply for those rental units that are pet friendly. Simple economics, right? The higher rental income should compensate you for the increased risk of damage.
2. You gain access to a large pool of potential tenants that most other landlords are missing out on. By allowing pets in your property(s) you are gaining access to a huge group of potential tenants that most landlords won’t give the time of day. Many pet owning renters are hard working, responsible pet owners that will take great care of your investment.
3. Tenants are more likely to become a long-term resident. It’s difficult for them to find another pet friendly property of any kind, let alone one as nice as yours! Moving is also more expensive and complicated when pets are involved. This means that tenants are much more likely to stay long term.
4. In many jurisdictions the presence of a pet allows the landlord legally collect a much larger damage deposit. For example, where I live in British Columbia, a landlord may only collect the equivalent of a half months’ rent as a security deposit against damage by tenants. However, if the tenants own even a single pet the landlord is entitled to collect another half months’ rent as a “pet deposit”. That means you can double the amount of money held in reserve to cover any damages that occur to your rental. In high rent regions like Vancouver Island, this can be more than $1,000 in extra deposit dollars held by the landlord. In my experience that additional pet deposit makes tenants feel like they have more “skin in the game” and results in more responsible and caring tenants.
5. In some jurisdictions landlords are allowed to collect a non-refundable pet fee. It’s not legal in Canada, but some US jurisdictions allow for specific pet rent fees to be charged if “pet agreement” riders are added to the rental contract. 

Cons

1. Higher risk of damage to the rental unit.  Well I believe many people overestimate the likelihood and extent that someone’s pets will damage your rental, I don’t deny that the risk exists. If you allow pets at your rental, eventually some kind of pet damages will occur. 
2. Potential source of noise. We all know someone with a small dog that. just. won’t. stop. barking…sharing a common wall or yard with that dog owner would be miserable. This is why it’s important to include pets in the vetting process for potential tenants.
3. Pets on your property can cause damage or start an infestation if they escape. What happens if your tenants’ pet escapes? Hamsters seem like a cute and harmless child’s pet, right?  Will they still seem cute and harmless after they escape and chew through the electrical wires in your walls? Some species can cause a surprising amount of damage and reproduce exponentially when uncontrolled. 
4. New prospective tenants in that unit or adjacent unit may have allergies and be deterred from renting your units. Allowing pet owners applications does increase your total pool of potential tenants but it also removes a certain group of people from said pool. 
5. Safety of other tenants. It’s a relatively rare hobby, but the aggressive dogs or venomous snakes some people consider to be ideal pets can be extremely dangerous. I believe that as a landlord you have a moral responsibility to the public and other tenants to ensure that any pets living in your income property are not a danger to the public if they escape.

I believe that so long as you have a capable property manager (whether it’s yourself or a third party) and take some reasonable pre-cautions the pros far outweigh the cons for most rental properties. Below are some common-sense tips and policies that I apply to my rental portfolio.

My Advice for Landlords that Allow Pets in their Rentals

1. Always try to meet a potential new tenants’ pets before agreeing to rent to them. This step will need to be added to the system that you use to screen tenants.  
2. Always include a clause in your lease agreements that requires the tenants to obtain a renters insurance policy. They usually cost less than $25/month and can prevent a lot of head aches and financial loss. You should include a mention of this in your rental applications form so that people are not surprised when you bring it up. Also be aware that your property insurance provider likely has a blacklist of dog breeds that they refuse to ensure and will not allow on your property, regardless of local housing law or terms in your rental contract. The company providing your tenants renters insurance will likely have a similar list. 
3. Never allow tenants to keep venomous reptiles or amphibians. The liability risks are just too high.
4. Never allow tenants to keep pet rats, mice, or insects. Yes, they can make great pets! However, they can easily turn into a pest infestation when they escape. I don’t believe the benefits outweigh the risks.
5. Don’t allow tenants with pets to keep stereo typically “dangerous” dog breeds like pit bulls, rottweilers etc. A tenant that feels the need to keep any kind of “guard dog” is a giant red flag! Be aware of the legality of this in your jurisdiction. In some provinces you are not allowed to forbid specific dog breeds. Many landlords get around this by using size restrictions instead. Tenants in adjacent rental units will likely be deterred by the presence of any dog breeds that have a reputation for aggression. I realize that not all dog breeds deserve their fearsome reputation and that there are examples of completely safe and trustworthy individuals in any breed. However, this is all about managing your risk as a landlord/business owner. The goal here is to protect yourself and your tenants, not to make everyone happy. Many cities and towns across Canada already ban the ownership of “vicious” dog breeds like pit bulls. They have banned these dog breeds because there is statistical evidence showing that these dogs bite more frequently than most other breeds. Protect your business and your other tenants by avoiding these animals. 
6. Don’t allow tenants to keep fish or reptiles in rental units where they don’t pay the electrical and water utilities themselves. The lights and water heaters can rack up large utility bills that will erode your profit margins. If the renters will be responsible for their own utility bills then it may be worth considering the potential benefits and risks more closely. 
7. Try not to disregard prospective tenants that have some kind of certified assistant or therapy animal. First and foremost, it’s unethical and illegal! People who require an assistant or therapy animal have the right to reasonable accommodation from their landlord. On a practical note though, those animals have undergone at least some level of professional training and testing in order to become registered working animals. Those animals are far less likely than a traditional pet to be poorly behaved or damage your property. Situations like this don’t fit into the normal pet rent scenarios that most real estate investors encounter.