Tenant Requested Lowered Rent AND a Dog

40 Replies

I own a "B+" SFR in a HCOL university town with vacancy rates under 3%. I've owned this unit for the last 2.5 years and have had three turnovers since (first tenant broke lease after 5 months due to job loss and then rented to four college students the next 9 months. They graduated and left). I currently have a family-two parents, one with 6 figure professional job; other with a part-time professional job but is mostly a SAHM. They have three kids in high ranking public school half a block away. They have paid on time with the exception of one month when they were a week late (early on in their tenancy, in which I charged them a late fee as per lease agreement). They have been very good tenants and they are keeping the house clean and well. They have told me how much they like the house.

My question: They have asked for a 5% reduction in rent PLUS they want to get a dog.  Currently the lease states no pets and they have honored that.  Data research from 2018 shows that for our area, the rent is under the median price for a 4/2.  It's also been completely renovated, although it's on the smaller size, square footage compared to other houses in the neighborhood (1,500 sq. feet).  I also don't want yet another turn over as I've calculated at a minimum that would entail half to one full month's rent, which is less than the price reduction, however I'm reading most people actually INCURE additional rent for the addition of a dog.  I feel that based on my interaction with them, that they would be responsible pet owners, although pets always incur a level of damage.  However, based on the fact that their kids are in a school where they are happy, the low inventory of houses in our area, and the fact that many landlords don't allow pets, leads me to think they will be long-term tenants, which is what I'm looking for.  

Thoughts and advice from seasoned landlords?

My thought is: why are you even considering this? They are possibly below market so they should know they're getting a good deal by staying put. Why should you incentivize them even more?

As for the dog, good tenants tend to be good pet owners and take responsibility for their animal.

I would reject their request for a rent reduction. I would say the price is already below market and without a rent increase they will continue to remain below market. I would approve the dog at a rent increase of $50 a month.

If they don't like that, they can spend a couple thousand dollars moving to a new rental that will likely charge them market rate and reject the dog.

 Hi Stephanie, 

With vacancy rate that low I would not capitulate to their demands.  I’m not a big fan of tenants having pets 99% of the time. With those two things said if you do decide to buckle and give in I would give them one or the other but not both.  They do need to realize that you are in control of the situation so don’t do things that lead them to believe you’re not.  If they leave you before their lease is up keep their deposit to cover your one month of vacancy and move on  and this time add this to your  tenant screening procedure:  let the applicants rack up before you make a decision on your next tenant. That way you have a good pool to choose from and you won’t have to worry about violating any fair housing because you will not have to turn down any applicants they will just be beaten out by someone else.  I hope that’s what you’re looking for and it helps you. Have a great day. 

Exactly what Nathan G. said. Not that you owe them an explanation, but you could point out to them their rent is already below market, while also explaining you'd love to keep them as tenants. But there will be no lowering of the rent. As a matter of fact, since they are so clean, it should be quite easy for you to rent out the unit with zero days of turnover. They move out and the next tenant moves in (at market rate). I don't know about anybody else, but my property taxes just went up. The rent will be going up, not down. 

Given that they aren't going to find cheaper rent down the street, or likely within the school district, and with all the competition for rentals, aren't likely to move at all. 

Pets don't always cause damage and in fact, kids often cause more. In my experience. 

If it were my rental, given that I'd like to keep a good tenant and not have turn over costs, I would agree to a pet WITH a pet deposit, and not agree to a rent reduction

I do not charge "pet rent"

I too would say no to the rent increase. You should be raising the rents by 3 to 5% every year. Tell them you are doing them a favor by not doing an annual rent increase (so far).

Is your house pet friendly (no carpet) I allow pets but get a non refundable pet fee. Make sure the dog is a non aggressive breed or you will have trouble with your insurance company if they find out.

Thank you everyone for your responses! This has been very helpful.  Leaning toward no lowering of rent, allowing the dog with a pet deposit.  

@Stephanie

@Stephanie Jamgochian I would suggest a pet fee not a deposit and a $30-50 monthly pet.  No need to lower the rent any more than the power company lowering their rates. 

The good school district is the key .  they wont leave , schools are the key point

Obviously NO to the rent reduction, At end of lease raise rent 3-5%.

As for the dog if you have a no pet policy why would you consider allowing a pet. Was the no pet policy in the lease just a joke. If you allow the dog you will need to rewrite the lease. You can not allow a tenant to do something in violation of their lease.

No point in having a lease if you do not intend to enforce it or change it every time a tenant asks. You need to rethink what it is you really want for your business.

The answer to both questons should have been a immediate no.

Do what nancy Reagan advised “ just say no”

If you are under value you should NOT reduce your rent.

Good tenants are typically good pet owners.

In our state we can accept a pet deposit (which I make refundable) and we can charge pet rent.

I would keep the rent the same, lock them in for another year and offer them a pet addendum with an additional security deposit (100% refundable) and some pet rent.

@Stephanie Jamgochian maybe they are just stopping you from asking for a rent increase

I mean, they asked for a decrease and you come back with an increase?!?!??

Or maybe they knew a pet would increase their rent so they wanted to offset.

Either way looks like you came to a good conclusion and both of you will be happy with the results

Another vote for not reducing the rent as you are already below market value.  As for the dog, if you are fine with a pet in the house says yes, but get a non-refundable deposit.

theyre probably a frugal family and they decided to give it a try. (cant knock them for trying) you have the leverage, dont forget that. definitely decline the offer and possibly let them know of a price increase if they get the dog. propose to them that next year rent is going up 3% but if they dont get the dog you will keep their rent the same? if you like them, give them a counter offer

obviously the tenants want to get a dog and not pay a fee or extra rent...I doubt they are expecting you to reduce the rent. your choice should be based on the unit itself. got carpet, a fenced yard, close neighbors that might complain etc.

I'm going to be me.  NO on both requests, and if that makes you not want to stay give proper notice and get the H out.  Don't care about your kids or your schooling or your career or your SAHM dedication.  My house, my rules. 

Humans, man, they'll game the system.

another vote for no on both requests. 

Curious, how did they present the justification for the rent reduction? Saying they are good tenants,they are suppossed to be good tenants. You picked them because they were qualified. Stand up to them and say at renewal time we look at rents in the area and expenses. Rents went up, expenses went up so we are increasing rent. You keep the place nice so i will only increase it $x amount. If you want a dog it is $x/mo. breed/age must be approved by me. Unless your market has declined they are testing you. What does he do for a living, a position of power or negotiator? If you are not at market write a nice rent increase letter. They know you dont want a vacancy and are playing that.

@Stephanie Jamgochian we raise our rents every year, I would raise their rent a small amount and then charge a small pet fee. Or at least charge a non refundable pet rent.

if we ever provide any discount on rent, say $20/m for 12 months, it would be no discount for the first 11 months, and 240in month 12 contingent on completion of lease with no late payments.

@Stephanie Jamgochian OF COURSE ITS A NO ON THE RENT REDUCTION! Why are you so afraid of turnover ?

Or a better question is why are majority of BP members afraid of turnover ? It is because they are over leveraged to the max and cant afford two months worth of mortgage, that's silly. I have nothing but MTM terms on my rentals, and they are paid off so letting tenants go is not a big deal to me, ill fill it back up in no time. Probably a couple weeks to fill. But then again i do mobile homes, class C / D tenants but it works for me. I don't think I am ever going to have rentals where i owe such a huge mortgage on the property and hardly make positive cash flow. That is"drip money"


@Colleen F. They presented it as "we've had friends send us rentals that are "X" amount lower for houses in our area, but we really like the house.  Would you consider lowering our rent to "X" amount? Also, our kids are at that age when they would like a dog.  I know you have a no pet policy, but we were wondering if you would consider us having a dog?"  I just told them I would get back to them.  After doing a quick market research of rents in our area, yes, there are a couple of homes (literally-there are so few homes available here) that are in the price range that he mentioned but they do not have the upgrades and they are in crappy school districts, however we are just under the median for prices in our city.  

Don't budge. You'll do fine @Stephanie Jamgochian . You budge on this, they'll start trying to pull your leg on more issues. 

It feels to me as though they requested both hoping they'd get a yes to one.  I'd personally say no to both unless you're open to pets for a fee and increase rent.  If they balk when you increase the rent let them know that their inquiry triggered you to check the local rental market and that you are actually below market rate. 

This is a saying I see a lot on BP, "This is a business, not a charity". 

Why lower the rent, when you can raise it? Turnover is expect in this venture. Long-term tenants are ideally, but never bank on it. Just like property appreciation. 

I charge a pet monthly fee for my units. If you elaborate thoroughly why you charge the rent, most will understand. We charge a pet fee to cover any damages from odor, hair, stains, etc.  

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