Pet Rents: How I Am Increasing Cash Flow

20 Replies

After seeing several posts regarding pet rent, I decided it is a perfect way to increase cash flow. I used to charge $300 PET FEE for new tenants. After the first year, I didn't collect another time upon renewal. I used to tell tenants that was a one time fee as a sales pitch. It worked. Now as I am writing new leases, I am collecting pet rent. $25 per animal. Over the course of a year, that equates to $300 EACH AND EVERY YEAR. One new tenant has two dogs. That equates to $600 per year and they want to stay additional years. Another new tenant has one small dog. At $25 per month, after the first year that equates to $300 PER ADDITIONAL YEAR without raising rents. Thanks BP members for teaching me how to increase cash flow!

We've been doing the same for years. As you learn your market, you may be able to increase that amount quite a bit. I know some owners that charge a $300 fee up front plus $100 a month for a pet. It all depends on the level of demand.

Congrats John! Pet fees and rent are a great way to increase your cash flow. As Nathan said, you could potentially increase the fee and pet rent depending on how competitive your market is! I've seen pet fees/deposits as high as $500 and $50/month pet rent.

In my market I charge $100 monthly for a dog, $65 for a cat. It used to be $150/$75 but there’s an oversupply currently. All depends on your market.

I’ve also only got one unit below $1k monthly so.... again, market.

People around here gladly pay it

Curious how you market that and what that premium is approximately? I’ve marketed “smoke free” reasonably successfully in the past but in my market with so few pet friendly rentals I’m not positive it would work.

I don’t need to market it- beautiful units. In my market pet free rentals are the upper tier units. The pet friendly rentals are always older more run down and cheaper. 

As such our units rent at a much higher rent. They are happy they don’t have to deal with urine smells, incessant barking, neighbor’s overly friendly dog jumping all over them. Hence the premium my tenants pay.

Got it. My market is similar as far as mainly dumpy pet friendly rentals. I target top 10% in quality / first impression across the board then add my pet premium. Each their own.

Originally posted by Account Closed:

Curious how you market that and what that premium is approximately? I’ve marketed “smoke free” reasonably successfully in the past but in my market with so few pet friendly rentals I’m not positive it would work.

 All my units are smoke free. I advertise "pets on a case by case basis".  If submitted for approval, I determine if I want to allow the pets and inform applicant I charge $25 ADDITIONAL for pets. So far no resistence. 

Posters are referring to "dumps" in their posts. I don't buy "dumps" and so far I have inceased income $1200/year.

I don’t think anyone (including me) was saying your places were dumpy? I was saying the vast majority of pet friendly rentals in my market are. And they’re also generally located in D neighbourhoods. My strategy is have a ~ top 10% suited sfh in a A/B neighbourhood, keep rent at the top of the market, and add on $100 monthly for a dog and $65 for a cat..

The pet owners in my market don’t even want to rent at the pet friendly places and regularly apply even though it is not pet friendly. This is because they want to live in a beautiful, clean pet free building. The pet friendly buildings are dumps.

Having remediate pet units I would recommend collecting a hell of a lot more than $25 a month.

Nice pictures

Originally posted by @Patrick M. :

The pet owners in my market don’t even want to rent at the pet friendly places and regularly apply even though it is not pet friendly. This is because they want to live in a beautiful, clean pet free building. The pet friendly buildings are dumps.

Having remediate pet units I would recommend collecting a hell of a lot more than $25 a month.

Nice pictures

 Why would someone who has a pet apply for a pet-free building? Do they give away their animals? 

Also, you may get away with that in Red Bank, and being pet free can make sense in an apartment anyway, but in many markets and SFH you cut your own throat with that policy. And if you rent to good people they generally have good pets. I've had dozens of pets in our units and they have done less damage than bratty kids, and you can't charge extra for Rugrats!

OK, so here's the thing.  60% of tenants have pets; 30% of landlords allow pets.  What's wrong with this picture?

We have found that it's better to deal with the devil you know, meaning I want the pet to have shots, license, and be mentioned on their renter's insurance.

This is, IMHO, not a way to increase income, but simply to (hopefully) break even with any damage the pet does.  More importantly, it "legalizes" the pet and the pet owners feel better about that, and usually stay longer.

Put a weight limit on dogs.  Any breed of dog can be allowed IF the tenant gets a rider on their renter's policy covering any "insurance classified dangerous breed".  However, even a Chihuahua can be an ankle biter, so if they have a past history of aggressive behavior, lose the dog or find another apartment.

BTW, we have two dogs we recued from animal shelters, and if I were ever a renter again, I'd move before I'd give them up!

The majority of my tenants have dogs. I will continue to raise rents as leases permit. An extra 2K a year sounds nice:)..and maybe I will try for more with new tenants. One has two dogs and just signed, giving me an extra $600 a year on that one unit. And yes, no doubt many pets do less damage the children....and either one can cause a claim against a security deposit. 

Originally posted by @Tatyana M. :

@Patrick M. how do you deal with service animals? seems every pet now is essential to every tenants' well being

 BY law: no increased rent or deposit. Cannot be denied if truly a service animal. 

@JD Martin my point exactly. I actually started a thread about it- very frustrating... they will wait until the last minute to spring it on you and beg or bribe...

And yes- SFH vs. apartments is a world of difference. One asset becomes a complete loss on vacancy and the other simply lessens cash flow.

As for the rug rats, I wouldn’t know. When we renovate and replace bathtubs with showers and en suite laundry with coin op we have seen a very steep drop in applicants with children.

As for service animals I will deal with that when I have an applicant with one. Our units are Just below my markets luxury units. They are expensive- working professionals rentals.

Originally posted by @Patrick M. :

@JD Martin my point exactly. I actually started a thread about it- very frustrating... they will wait until the last minute to spring it on you and beg or bribe...

And yes- SFH vs. apartments is a world of difference. One asset becomes a complete loss on vacancy and the other simply lessens cash flow.

As for the rug rats, I wouldn’t know. When we renovate and replace bathtubs with showers and en suite laundry with coin op we have seen a very steep drop in applicants with children.

As for service animals I will deal with that when I have an applicant with one. Our units are Just below my markets luxury units. They are expensive- working professionals rentals.

This is fallacious thinking. You don't compare one SFH to 10 apartments; you compare 10 SFHs to 10 apartments. When I have a vacancy (virtually never), it simply lessens cash flow. Your statement would be true if you only own one house. I don't want to muddy the thread with a debate between SFH and MFH but compare apples to apples if you're going to make the comparison. By your logic, the guy that owns a 10-unit building is a fool compared to the guy who owns a 100-unit building, because one vacancy in your building is a 10% loss versus 1% for the other guy.

One other question, though: what kind of high-end working professional goes for coin operated washing machines over in-unit setups? I grew up in Jersey and only working slobs sloughed their laundry down to the laundromat or the basement machines. 

Not mine :)

And a SFH has one mortgage, one water bill and one tax payment. My multi has 1 mortgage, 1 tax payment and 1 water bill. A vacancy ain't the same.