Welcoming Pets Is a Smart Financial Move In Rental Housing

Welcoming Pets Is a Smart Financial Move In Rental Housing

To maximize appeal to today’s pet owners, here is why welcoming pets in rental housing is a smart financial move.

By Judy Bellack

According to the American Pet Products Association, 70 percent of American households own a pet, and pet owners in the United States spent more than  $100 billion on their animals in 2020. The popularity of pets and the amount of money we are willing to invest in them indicates that the traditional definition of a pet has changed dramatically from a cute and cuddly addition to the household to a treasured member of the family who is an integral part of our emotional well-being.

It’s a happy coincidence that multifamily communities can embrace this reality while also boosting their bottom lines significantly. The 2021 Pet-Inclusive Housing Report, which was conducted by Michelson Found Animals and the Human Animal Bond Research Institute, reveals the powerful financial and operational benefits operators can experience by making their communities as pet-inclusive as possible.

The Gains from Being Pet-Friendly

When pet owners find a welcoming environment, they want to stay. According to the PIHI report, residents in pet-friendly rental housing stay about 21 percent longer than those in non-pet-friendly housing (the report defined pet-friendly housing as any housing that allows residents to have at least one pet, regardless of other restrictions). Residents tend to become familiar and dependent on their pet-friendly neighbors and communities, particularly as 72 percent of renters say pet-friendly housing is hard to find. When residents know their neighbors and communities support their pets, why make a change?

If residents are staying longer, that’s fewer units for the leasing team to fill, which means reduced marketing and turn costs. And even when these units are vacated, they’re not on the market for long, resulting in significantly lower vacancy loss. In the PIHI report, 83 percent of surveyed owner/operators state that pet-friendly units are filled faster, and 79 percent say that they are easier to fill. These dynamics free up leasing managers and teams to support and grow communities in other beneficial ways. All of this adds up to more net operating income.

Welcoming Pets Is a Smart Financial Move In Rental Housing
If residents are staying longer, that’s fewer units for the leasing team to fill, which means reduced marketing and turn costs.

The Losses from Restrictions and Not Being Pet-Friendly

Apartment communities can really shoot themselves in the foot if they’re not hospitable to pets. For starters, if a potential resident encounters any issue with being a pet owner, there’s little chance they’ll rent from that community. This is an issue that very few pet owners are flexible on since nobody wants to give up a member of their family.

Furthermore, communities often are housing unauthorized pets when they have restrictive pet policies and, in turn, are losing out on potential pet-driven income. According to the PIHI report, about 11 percent of pet owners reported leasing with unapproved pets. As a result, owner/operators are missing out on more than $1.5 billion in potential revenue each year in the form of pet fees and deposits from pets already residing in the community.

Restrictions on size and breed continue to be one of the biggest struggles pet owners face. While 76 percent of owner/operators say their units are pet-friendly, only 8 percent of those are free of restrictions. That stance can definitely have a negative impact on a community’s revenue. Consider this: of the top 10 breeds in the United States according to the American Kennel Club, six would be excluded due to typical multifamily weight and/or breed restrictions.

Broadly speaking, it’s time for operators to consider relaxing their breed and weight restrictions for pets in rental housing. Many restrictions are based on decades-old research that has been denounced even by the organizations that conducted it. In addition, there are services available that run background checks on specific pets and owners to give communities a better understanding of the individual animals renters are bringing with them.

If residents are staying longer, that’s fewer units for the leasing team to fill, which means reduced marketing and turn costs
Consider increasing the number of pets permitted in each unit.

Ways to Make Communities More Pet Inclusive

Even with many communities considering themselves pet-friendly, more than 70 percent of pet-owning residents reported difficulty in finding suitable housing, largely due to restrictions. Clearly, this presents a huge opportunity for rental-housing operators.

To maximize appeal to today’s pet owners and to enjoy the resulting financial benefits, consider the following steps for pets in rental housing:

Rework pet deposits: Fewer than 10 percent of pets cause any damage, so consider using regular security deposits, or raise them slightly, to pay for the relatively little damage they do cause. And if you can’t entirely eliminate these fees, offer to waive the pet deposit or offer a free month of pet rent for first-time residents.

Remove/reduce breed and weight restrictions, and consider increasing the number of pets permitted in each unit. This is not to suggest allowing a resident to have 12 dogs, but it could be beneficial to increase your allowable pets to two per household, for instance. To pave the way for changes like these, check with your insurance company and secure a policy that is more pet-friendly. On the resident side, mandatory renter’s insurance policies can help with any pet-related claims. Again, there are many misconceptions about large dogs and certain dog breeds; the rule of thumb is that concerns are associated with individual dogs, not a category.

Implement an easy-to-use screening process: New services make it easier for communities to screen individual owners and pets for issues. Using these technologies also assures all residents that you’re working to have a community with safe and well-behaved pets. Make sure your process is easy to use. Furthermore, getting residents to sign agreements that outline acceptable pet (and owner!) behaviors, policies and disciplinary action can protect the overall well-being of the community and ensure that any pet-related issues are handled promptly.

Embrace pet amenities: There are countless amenities that create a more pet-friendly community. Dog parks, washing stations, waste stations and pet events are all great ways to let residents know you care. Consider partnering with a local shelter to connect your residents with opportunities to adopt or foster pets and waive any pet fees if they do.

Apartment owners and operators are always looking for an edge over the competition and the next thing that’s going to boost a community’s performance. In today’s pet-obsessed world, creating a truly welcoming environment for pets is a great way to attract and retain residents and boost the bottom line.

About the author:

To maximize appeal to today's pet owners, here is why welcoming pets in rental housing is a smart financial move for landlords.

Judy Bellack is the industry principal for the non-profit Michelson Found Animals Foundation, helping to advance the Pet-Inclusive Housing Initiative. She is a 30-year veteran of the multifamily industry, holding various executive leadership positions with some of the foremost supplier companies. Judy has served both as Chair of NAA’s National Suppliers’ Council and NMHC’s Supplier-Partner Alliance and was the recipient of NAA’s Outstanding Supplier in 2010. She currently operates a consulting practice advising start-up technologies in the multifamily space.

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