Real Estate Investing: You Should Market Your Rental Property to Dog Owners

As a real estate investor and a dog owner, I'm sure my dog is much more interested in inspecting the landscaping than rushing home to Zillow the comps in the neighborhood. But including my golden retriever on some of my property hunting trips has definitely tuned my eye (and his nose) to some of the issues facing dogs and their owners in today's market, primarily the rental market.

The American Pet Product Manufacturers Association estimates that 63% of households today have pets, yet less than 10% of rental housing anywhere allows animals. The amount of money spent on pets has doubled within the last decade to $40 billion+ in 2007. This equates to very generous pet owners (and their very spoiled pets) being restricted from 90% of the available rental property out there. And this means you, Potential Landlord, are discouraging at least 60% of potential renters out there from even considering your property if you have a "no pets" policy at your property.

So, back to this new breed of pet owner and their $40 billion+. Many of these are the young professionals you hear about who have put off having kids for their careers. I know I consider my dog part of the family. In kind, no matter how great a property was, these people wouldn't even look twice if the place didn't allow dogs.

Landlords with a pet friendly policy have fewer vacancies and can charge higher rents.
The last time I was looking for tenants for one of my units, the "pets welcomed" part of the ad was the feature most mentioned by prospective tenants (despite the new tile, on-site laundry, and secured parking). 4 out of 5 of the inquiries I received were from people interested specifically in the open pet policy. Sometimes people didn't even bother to ask about utilities or square footage, but rather about how close we were to the park and how many other dogs were in the neighborhood. In many ways, they were shopping the neighborhood like parents shop for a good school district for their kids. Though the unit was priced at the upper end of the comparable rentals in the area, the vacancy was filled quickly.

In theory, with dogs providing companionship (and security) for their owners, tenants are likely to remain longer, which reduces turnover and the need to advertise for new tenants (and pay property management fees!) or screen applicants.

Here are some of my recommended ways to make your property more attractive to this new breed of pet owner (and their $40 billion+):

1. Consider a Pet Checklist as part of the screening process.

A well groomed, well behaved pet is one of the best signs of a responsible pet owner according to the New Hampshire Humane Society. They have a great checklist to help you get to know your prospective tenant and their pet.

2. Weight limitations pretty much guarantee you're going to get a yapper for a neighbor.

Of the AKC's top 10 dog breeds for 2006, 5 of them are less than 30lbs, which is the typical weight limit cutoff for most multi-family housing. These 5 breeds include the Chihuahua, Yorkshire Terrier, and Shih Tzu. I characterize these dogs with the term "yappers". Don't get me wrong, I don't mind the smaller dogs, although mine is a Golden Retriever. But certain breeds simply tend to be noisy. These include: Terriers, Beagles, Collies, Norwegian Elkhounds, Finnish Spitz, American Eskimos, and most toy breeds.

Now, what about the other 5 on the AKC's top 10 list? Among them are yellow labs and golden retrievers, which weigh about 70 lbs. on average. The Fair Housing Act only applies to humans, so feel free to discriminate against aggressive breeds instead! Okay, that's not fair, but what it really comes down to is temperament and how a person has trained their dog.

3. Don't make the pet deposit non-refundable.

In worst case scenarios, people who know they aren't getting their pet deposit back won't have much incentive to clean up after their pets. A pet friendly property will be able to garner top market price anyway, so why make it look like you're trying to punish a person for having a pet?

Additionally, pet owners can be a bit cult-like (in a good way.) Just drive by a dog park sometime. Word of a pet friendly landlord with pet friendly rentals spreads like wildfire, particularly among larger breeds. You may never need to advertise again! And you may end up with a pack of Huskies at your four-plex on Pine St., but no one will ever vandalize your property. It's built in security!

The Humane Society of the United States has a page with Web sites that list animal friendly housing. Many of these Web sites will allow you to list your property for free.

Don't limit your options when marketing to 100% of your prospective tenants out there. Keep an open mind to pet owners, their billions of dollars, and particularly the lack of rentals available for "big" furry guys.