Allow Pets or Risk Vacancy?

[Jeremy Bartlett]

Looking for some general advice:

We have some tenants who are really great - military couple, clean, quiet, pay rent on time, etc. They are wanting to break their lease 5 months early because they have a dog who is currently bouncing around New Jersey from home to home and they want to bring him up here (Alaska). I have already explained that breaking their lease would result in the forfeit of their security deposit. They offered to bring us tenants to replace them, I explained that they would have to pay an application fee and pass our background check before we agreed to let them take over.

My question is, if we allow them to have their dog they have expressed interest in staying put until Sept of 2020. Is it worth going through the advertising/tenant swap out just to avoid our otherwise ideal tenants having a dog? We were planning on raising rents from $1200 to $1350 when their lease expired June 1. If we charged $50/mo pet rent on top of the base rent increase, is that worth having the security of two years of reliable rents at slightly above market rates? Should I get them to sign a 2 year lease when we finalize this conversation to ensure that will be the case?

[Mark Ainley]

@Jeremy Bartlett I am big on allowing pets and simply covering your risk especially with over 50% of tenants having pets or wanting to leave open the option of having pets these days.  Ask yourself "What is the worse case scenario here(based on your current experience you have with these tenants)."   You may have to replace flooring, some chewed trim, landscape cleanup and maybe some other wall or scratching issues.  Make sure that amount is covered by additional pet rent, pet deposit, or general deposit(how ever you structure it).  I would think in this case there would be way more risk in an unknown new relationship with a new tenant without pets then allowing your existing qualified tenant to add a pet.

For our firm historically over the last 15 years highly qualified tenants have caused very little pet damage.  The horror stories you hear about pets usually surround many red flags in the application process with the actual tenant that were glazed over or risk accepted and their animals were never accounted for in the decision.  Our more then approved tenants with animals are never an issue for us.  

Keep in mind the tenants don't want to move so they may be willing to put up more deposit to not have to deal with moving and explain to them the breakdown of why you are asking for this amount.