Being a pet person myself, I've always allowed pets (within limits) in my rental properties. And with maybe one exception, all my tenants have had pets. It's one of the reasons people choose my rental over another. I know this because applicants tell me so.
I know the argument against allowing pets: Pets cause damage -- or at least additional wear and tear -- on property. And that's true. But running a landlord business warrants evaluating the cost-benefit analysis of allowing pets. If you haven't considered this issue since the pandemic (or ever) and simply haven't allowed pets, it's time to possibly reevaluate your policy -- pet ownership since the coronavirus is at an all-time high.
The pet picture overall
Americans love pets. About 85 million families (67% of U.S. households) owned a pet in 2019, according to the American Pet Products Association (APPA) National Pet Owners Survey. Not surprisingly, most people own dogs and cats: 63.4 million and 42.7 million, respectively. This still leaves a sizable number of people who don't own pets, but you can see how much landlords limit their market by having a no-pet policy.
How COVID-19 increased pet adoption
What didn't change during the pandemic? As the country went on lockdown, people changed the way they lived their lives: They started exercising at home more (Peloton (NASDAQ: PTON) sales went through the roof -- the company more than tripled its first-quarter revenue as of November 2020). And, of course, people started working from home.
Americans, used to more hustle and bustle from the gym and office, became bored and lonely while sheltering in place. Hello, pet adoption. Pets provide companionship, and in the case of dogs, get people exercising outdoors instead of a stuffy gym.
Pets, popular before the pandemic, are in even bigger demand now, as pet adoptions are up across the country. New York millennials in buildings that don't allow pets are moving. In Ohio, Cuyahoga County's pet adoption rates have "skyrocketed."
How to run a cost-benefit analysis
Running a cost-benefit analysis helps business owners make decisions. Regarding pets, the way landlords can determine whether it might be worthwhile to allow tenants to have them is to determine whether you'll miss opportunities by not allowing pets. (You will.) You should also determine whether those missed opportunities might lead to money left on the table. (They will if your rental stays vacant an extra month or two.)
Every landlord situation is different, but let's take mine as an example. My business is single-family detached homes. With that said, my market is probably more pet-oriented than a landlord's with rental units in buildings. So YMMV (your mileage may vary), so to speak.
Whenever I advertise a vacancy, most applicants, at least 80%, have a pet. I probably could still have a successful business if I didn't allow pets, but there's no way I want to limit my applicant pool by 80% or more. So I allow them. My cost (losing 80% of applicants) is too high; therefore, the benefit I get regarding the number of applications outweighs the cost of possible pet damage, of which I have a plan.
I charge pet rent, which increases the monthly rental amount for renters with pets, but this policy is actually a win-win for applicants and for me. If I didn't charge pet rent, petless applicants (all other things being equal) would win the spot every time. But the extra money renters pay in pet rent levels the playing field.
The additional money I collect in pet rent goes to extra costs I typically incur to get the property back in shape. Case in point: Upon a recent move-out inspection, I found the tenant's dog had chewed the windowsill. I needed to pay to have this fixed, but the extra pet rent I charged covered the repair cost.
The Millionacres bottom line
The surge in pet ownership, particularly among millennials, has led many to seek out pet-friendly rental properties. If you don't allow pets in your rentals, it might be time to reevaluate that policy.