pet fee vs pet deposit - or both?

18 Replies

Hi BP community!

My wife and I are purchasing a duplex in Atlanta. One side of the duplex has tenants that might stay after we close, the other side is vacant. We're moving into the vacant side and have two dogs, so we want to allow our tenants to have pets. But we're not sure whether to charge our tenants a pet fee or deposit (or both). 

Since we're living on the property and my lovely wife has past experience as a landlord, we thought we'd write up a 12-month lease and manage the property ourselves. At least for now until we get tired of managing things :)

The duplex has separate and fenced back yards. The occupied side has carpet in the bedrooms/stairs and laminate flooring. 

What are the pros and cons of pet fees and pet deposits? Any suggestions on what we might want to charge?

Hey Greg. I would definitely charge a pet deposit and make it at a value where if you needed to repaint the unit and recarpet that the deposit would cover for that. I would also consider making it non-refundable because your next potential tenant may not have pets and might not like the smell of dogs everywhere and you'll need to clean it.

In addition to the pet deposit, an additional fee on the lease per month is common. Just about every apartment I rented had this option.

You'll have to look in your area/market to see what the market will bear as far as these deposits and fees. You might try calling an agent and ask what is common for that amount in your area as well or just call some nearby apartments and ask them too!

All things being equal, a pet fee would be better than a pet deposit because a fee is income whereas a deposit may have to be returned (if no pet damages).  Also, check your state/local laws on the legality of a "non-refundable deposit".  In my state, that wouldn't be legal because a deposit can't be non-refundable.  Lastly, if you do end up going with a deposit instead of a fee, I'd suggest just going with a larger regular security deposit, as opposed to a regular security deposit plus a separate pet deposit.  Again, check your state/local laws, but in some states if you specify a "pet deposit" than that portion of the deposit can only be used for pet-related damages.  It'd be better to just take a larger regular security deposit that could be used towards any damages, whether they be from the pet or the tenant.

Pet fee.  Because there is never such a thing as a pet that does no damage.  They put wear and tear into your unit and eventually you'll pay to fix it.

This is really about the language.  A FEE is a cost associated with the priviledge of having a dog.  A DEPOSIT is refundable at the end of the lease term if the condition is left the same as it started in.

I think the real question you should be asking (and maybe you are, and I am just getting caught up on the language) is should I charge a pet FEE and Monthly pet RENT.

We charge a non-refundable pet fee of $300-$350 (depending on the size of the dog).  PLUS a $25 per month Pet rent.

Monthly pet rent is becoming more and more common.  It can be as little as $20 per month, or go up, depending on the number of dogs, size of them, age of them, etc.  By calculating the risk of damage associated with the pet in question, your monthly pet rent can be a great way to mitigate the amount of expense after the lease is over to make repairs (because the pet rent has been adding up to cover them).

So, long story short.  The pet fee taken upfront covers the regular wear and tear that pets bring to a property.  The pet rent covers for any repairs you may have to cover at the end of the lease.

Best of luck to you!

Some jurisdictions allow one or the other, some both.

Fee = income. No returns. (I add it to rent amount so there can be no arguments about “but my Fido didn’t even eat the baseboards!”)

Deposit = might be kept, might not. Might get argued if it’s kept.

The other benefit of just adding it to rent is that if the 4 ledger dies... it’s just rent. Doesn’t change.

Deposits will never cover the cost if there is damage so to properly manage a property you must make regular inspections, take note of damage, have it repaired and charge it back to the tennat immediately. Do not deduct costs for repairs from deposits. The deposit is only used to cover damage discovered at/after move out.

Your best option is to charge a monthly fee and do regular inspections billing for damage as you go along. People love their pets, you should be able to collect an additional $50/month. This could also dissuade applicants with pets from applying which is even better. Do not accept cats.

Put all tenants on M2M to remain in control of your investment. 

I also wanted to chime in that, just because you all have dogs, doesn't mean you all need to let your tenants have dogs.  It's fine, if that's a choice you all want to make.  But don't feel like there is an obligation.

I also house-hack with a duplex.  I have a dog and I have chosen to allow tenants in the other unit to have a dog.  Most of the tenants I've had for that unit had at least one dog.  Here are the pros and cons:

Pros:

  • Larger pool of potential renters.  Plus, the shared yard is larger than average and fully fenced in.  Major draw for dog owners.
  • Monthly pet fee for added income.  I personally don't charge a pet deposit, but it's not unusual for my area to charge both.

Cons:

  • Most tenants dogs have not caused any damage, but some have.  Nothing too major, usually some chewed up trim work.  But then, I also don't have carpets in that unit.
  • People are HORRIBLE with cleaning up after their dog(s)!!  Even tenants who have been awesome in every other way have really dropped the ball on this.  And my husband and I end up being the ones who pick up the slack in the yard.  And by "slack", of course I mean poo, lol.

I do have some breed restrictions and I don't allow puppies.  Definitely check your property insurance on breeds.  Since the yard is shared, I also make sure the tenant's dog(s) are friendly with both people and other dogs.  My own dog is super friendly with other animals but, if she wasn't, I wouldn't allow dogs at my personal duplex.  Since the inherited tenants don't have any dogs, I'd require them to run any dogs they wanted to buy/adopt past me.

@Greg Mayer ,

We charge a non refundable one time pet fee rather than a deposit because Ohio law requires that we pay 5% interest on any deposit over 1 month's rent held over 6 months.  In addition we charge monthly "pet rent." 

You might want to check out the rules about deposits in GA. Some states make it a real pain to hold onto deposits so fees are easier.

Georgia doesn't really have any limitations on the amount of security deposits. We charge a one time fee for pets (dogs only, no cats) and the $250 fee is for one dog or two. We don't charge a rent for pets. The fee was originally intended to be a deterrent but most seem perfectly willing to pay it to have their doggy. We also have breed restrictions. Read your insurance policy, it may be spelled out in there.

Originally posted by @Greg Mayer :

Hi BP community!

My wife and I are purchasing a duplex in Atlanta. One side of the duplex has tenants that might stay after we close, the other side is vacant. We're moving into the vacant side and have two dogs, so we want to allow our tenants to have pets. But we're not sure whether to charge our tenants a pet fee or deposit (or both). 

Since we're living on the property and my lovely wife has past experience as a landlord, we thought we'd write up a 12-month lease and manage the property ourselves. At least for now until we get tired of managing things :)

The duplex has separate and fenced back yards. The occupied side has carpet in the bedrooms/stairs and laminate flooring. 

What are the pros and cons of pet fees and pet deposits? Any suggestions on what we might want to charge?

 Pet deposit is a set amount that is non-refundable and is usually something like $100-$250 depends ..... on top of that not unusual to charge an additional $25-35/mo for a fee...... lets face it, you may come out a victor or you may end up with a damaged home ........

In Ohio, we charge one months rent non refundable fee and $30-40 a month per rent. In our area allowing pets is not the norm so we gain a bit of an advantage doing this, although I’d suggest doing some research in your area so you remain competitive on pricing (depending on what other amenities you may offer compared to the market). Leaving the extra charges as fees eliminates any debate over whether a ‘pet deposit’ can be used for specific damage.

@Greg Mayer ,

BOTH!   Make sure you do a non-refundable pet deposit, or pet fee.. whatever you want to call it, make sure it's clear that it's a 1x fee, and it's not coming back.       Do *NOT* make it refundable, because then you'll have to prove the animal did damage, vs. nonredunable... if the animal didn't do anything, if you chose to give it back you can, they won't complain!

Also, charge pet rent that is comparable to others in the area.. most I'd say are $20-$50/pet with a $200-$300 immediate nonrefundable deposit, that's what's in most cities.       Your market determines what's the correct amount, look at it from a renters eyes and check comps.     

"People are HORRIBLE with cleaning up after their dog(s)"

There is a simple solution to this problem if you are also living on the property . This will require diligence on your part to immediately pick up after your own pet.  

You send a letter informing them of their responsibility to pick up after their pets. You then heat up some cooking grease and pour some on each pile that has not been picked up. You keep your own dog out of the yard until your tenants dog has gone out and picked up after itself. The tenants will usually get the message when they see you applying the grease treatment. Espically when you explain what you are doing.

Thank you everyone for the ideas and suggestions! All very helpful. I think we'll end up using both an upfront non-refundable fee and a monthly pet fee, on par with what other units in the area are charging. 

Hi,  I charge a pet deposit for damage of 250.00 per pet and pet rent of 15.00 per month per pet.  Pets as wonderful as they are do create work upon turn over.  New carpet/flooring and pet smell will be required to rent to a none pet owner.  I am super fussy about my dog and he still smells like a dog.  so be prepared for the turnover expense.

the good news is pet owners tend to stay a long time.  It is hard for them to find a new place that will take a pet.

I tend to try to keep my pet properties in units without carpet, this helps with the turnover cost.

NO DEPOSITS!

You'll have to pay it back. A deposit, by definition, is refundable. 

Make it clear. Make it a FEE. And charge extra pet rent on top!

A couple of things -

1. I agree with what @Jennifer T. said above - don't feel like you have to allow dogs because you have dogs. I have learned there are vast differences in how people feel about caring for their pets and caring for their homes with pets. What you might find unacceptable in terms of damage or cleanliness, others may feel like it's just normal.

2. Fee is better than deposit. They pay it and you accept it up front as cost for your issues later.

3. I put it directly into my leases how often yards are to be picked up. This way there is no ambiguity. Some people are happy picking up a yard once a month. We require yards to be picked up *minimum* twice weekly.

4. We don't allow pets after a tenant has moved in. They usually have no idea about the history of the animal, their ability to train it, and other issues that don't come up with someone who's owned an animal for any length of time.

Outside of that, I wouldn't sweat having an animal too much if you don't have carpet. We have found that responsible pet owners keep the homes better than tenants that have little kids. And you're not renting out the Taj Mahal. 

I recently had a tenant in Garfield Heights Ohio that brought a dog into my home, clearly breaking the lease agreement. This is a Large breed that is considered dangerous and I am told is very intimidating. I was not comfortable with this especially after doing this behind my back as well as being concerned with any liability should this dog harm someone. Had she asked with a few financial adjustments I may have let her (probably not based on the breed). We decided to take her to court, I lost even though she clearly broke the lease agreement. The judge said she could keep the dog for the length of the lease without any increase in rent. WTF!!! I had my property management company handle this and it cost me $500+. She also started building a outside dog pen on th property as well with out discussing this with anyone. She has also been a real pain in the *** when we needed access to my house for appraisal when I cash out REFI it took her almost a month to let anyone have access? Enough of my rant :) 

FYI- I am an out of state REI so its not easy for me to visit the property

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