Today’s REI Classroom Lesson

It’s always been debated whether or not you should allow pets in your rental properties. Pete Neubig explains how his home rent quicker if you allow pets.

REI Classroom Summary

When allowing tenants to have pets in your rental property, there are certain policies you should set in place, including not allowing dangerous breeds of animals.

Listen to this REI Classroom Lesson

Real Estate Investing Classroom Show Transcripts:

Mike: Welcome back to the REI Classroom where experts from across the real estate investing industry teach you quick lessons to take your business to the next level. And now let’s meet today’s expert host.
Pete: Hi my name’s Pete Neubig. I’m co-founder of Empire Industries Property Management located in Houston, Texas and I will be your host for this REI Classroom. Today we’re going to talk about pets. Should I take them or not?
Mike: This REI Classroom real estate lesson is sponsored by
Pete: We manage about a little over 500 properties in Houston and what we have found is 80% of our prospective tenants have a pet, mainly a dog or a cat. We have seen on average our homes rent much quicker when you advertise pets are okay and that you accept pets. Okay.
We recommend that you have a policy regarding pets. If you have a property that you absolutely do not want have pet, then advertise that property with no pets but don’t advertise case by case basis and then decide that you’re not going to take any pets.
We do not take dangerous breed animals which are basically a list of animals, a list of dogs typically. That’s what we run into the most. I would contact your insurance company and get a list of what they consider dangerous breeds. The whole reason is if you do accept a pet that is a dangerous breed, it’s not that I have anything against pit bulls. I’m sure there’s a lot of friendly pit bulls out there but the insurance will not cover you if there is a pit bull in that property because they are considered a dangerous breed.
You want to get a pet selfie with the tenant. So if a tenant states, “Oh my dog’s name is Fluffy,” and it’s a small dog and then they take that pet selfie and it’s a lot Rottweiler, you know Fluffy the Rottweiler is a lot different and it’s not really something that you should take. They can take a picture of any animal. The pet selfie is important because they’re in the photo with the pet.
What we find is that people who disclose upfront that they’re going to have a pet, they are the ones that actually abide by the lease. It’s the people that say they’re not going to have a pet and then you go back six months later and you do an inspection and then they have one or two or three pets that are not on the lease and then of course now you have to evict them for breach of lease. Okay.
We recommend getting away from pet deposits. We instead charge a non-refundable pet fee. So it gets you out of having to worry when they move out. What damage did the pet cause versus what damage it didn’t cause? The non-refundable pet fee, believe it or not people pay it all the time. You can make it equal to what you were taking as deposit and then you get to put it right into what I call hip national, right into your hip pocket. Okay.
You can also charge pet rent. As a management company we do not. We charge the pet fee. We do not charge the pet rent but I’ve seen landlords do that. Also charge a pet inspection. So we charge the tenant a cost for pet inspection because when you go to that house, you want to inspect that house, you have to do a regular inspection and then you have to do a pet inspection. So there’s a charge for that. Typically it can be 39, 49, whatever you want to do. Just make sure it’s in the lease and you can actually charge a pet inspection.
One of the things that most people say I won’t take an animal that’s over X pounds, 50 pounds or whatever. Just because a dog is 50 pounds doesn’t mean that they’ll do damage. Actually an overweight 50 pound dog will lie around and do no damage to the home. So when you create your pet policy, be careful of the poundage. I know poundage means typically bigger dogs but typically bigger dogs actually do not do as much damage to the home as little dogs do.
So again just create a pet policy, get away from pet deposits, create pet fees or pet rent and make sure that don’t put a dangerous breed animal in your property. Again my name is Pete Neubig with Empire Industries Property Management. You can find us on the web at and thank you for joining me for this classroom.
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