Ask Lucas 031: Should I Charge a Pet Fee or Pet Deposit, and How Much?

Ask Lucas : Q&A for Landlords

Summary:

Sharon from California wants to allow pets in her rentals. However, she’s not sure what kind of pet fees or pet deposits she should ask the tenant to pay. Lucas gives his recommendation and some additional tips for handling pets.

Landlordology and Ask Lucas are brought to you by Cozy.

Transcript:

Lucas: Ask Lucas Episode number 31. Hey, what’s up, everyone. Welcome to Ask Lucas. I’m Lucas Hall and this is a bite-sized Q&A show where I answer your questions about landlording and property management. If you have a question, just leave a recorded message on asklucas.com and I’ll try to answer it in this podcast.

Today’s question is from Sharon who’s asking what kind of pet fees do I recommend that she charge and other landlords charge in order to cover themselves.

Before I get to that, let me tell you a little bit about Cozy. Ask Lucas is brought to you by Cozy, which provides modern property management tools and basically gives you piece of mind. That’s really what it’s selling. Cozy lets you screen tenants with full credit reports and background checks, and lets you collect rent online. The best part is it’s completely free. I’ve used Cozy for years to self-manage my own properties. I think it’s awesome. On top of that, my tenants absolutely love it and want to take it with them wherever they go. Check it out for yourself at Cozy.co. That’s C-O-Z-Y.C-O.

Now, let’s hear from Sharon.

Sharon: Hi Lucas. This is Sharon from California. In the past, I haven’t allowed pets in my rental properties. I found that tenants often sneak them in anyway, even though they know this isn’t allowed. I’ve decided to change my policy and allow pets. I’m not sure whether I should charge pet fees or how that even works. What kinds of pet fees do you recommend that I charge.

Lucas: Hey Sharon, thanks for your question. Pet fees and pet deposits are something that every landlord and property manager certainly has to make up a choice for themselves about that. I do think that everybody has a different opinion on it. I’ve been on both ends of the spectrum. I have been a landlord with pets in the properties. I’ve also been a tenant with pets as well. I have two Golden Doodles, one of which is 90 pounds and taller than my wife when he stands on his hind legs. His name is Bear and he’s just my first-born child. Seriously, I think he’s going to speak English any day now.

I think that pets for the tenants are very much like a family member, pets for anybody really for that matter. We, as landlords, have to take that seriously and realize that we are expanding our net that we’re casting out to find tenants by allowing pets. I’ve got a couple of opinions on different types of pets.

One, I’m not a huge fan of cats. I did say I was a dog lover, but I don’t let cats in my properties for a variety of reasons. One, they are self-cleaning. I know that sounds bad, but they do lick themselves clean. I just have a problem with things that are self-cleaning, I suppose, because it never really gets clean.

Two, the dander and the saliva that they pass around the house is just a lot worse for people with allergies typically. If you look at the data, there are more people allergic to cats than there are to dogs. You can get hypoallergenic dogs, whereas you can’t really get hypoallergenic cats, I guess unless you get the hairless ones. I think generally speaking, I’m going to have more problems down the road if I have a cat palace, rather than a dog house. I just don’t allow cats. I’m a dog only landlord.

With that said, if a tenant has a dog and they want to rent one of my places, I charge them a $50 pet fee. That is a monthly pet fee in addition to the rent. All that does is it gives them the right to have a pet. It’s per pet actually. If they had two pets, it’d be $100, $50 each. That is not in any way a deposit. That is not going towards any excess damage or anything. That is just a fee that they have to pay. It’s like a ticket price or an admission price. They don’t get that money back. It’s not refundable in any way. It’s a fee.

Some people believe in pet deposits. I personally don’t. I think that a pet deposit just makes the waters muddy when it comes to deposits. You’re traditionally collecting a security deposit. Then if you start adding on other deposits like a pet deposit, it gets very confusing. Because what if the damage that’s caused is actually caused by a child and not a pet, or a pet and not a child. You have to figure out, “Well, I’m going to take X number of dollars from this deposit. X number of dollars from that deposit.” It gets really hairy. I just don’t even worry about it.

If they do have a pet, I might actually require just an additional deposit that just gets added in with their general security deposit. Let’s just say it was $1,000 security deposit, or one month’s rent. I might ask them to pay a $1,500 security deposit because of the pet. Now it’s all mixed together. It’s one big deposit so I can use it for anything, most of which might be pet damage. I think that’s what I do.

I think that everyone needs to decide that for themselves because depending on your area, you might exclude a lot of tenants if you don’t allow pets. You might exclude other tenants because you do allow pets because they might have allergies. It’s really a personal decision based on your location.

Take take that with a grain of salt. I hope that helps. If you do end up handling it with your pet fees and your lease and all that, make sure you have a lawyer look at it. I am not an attorney. I’m not giving legal advice. It is critical that you do put a pet addendum in your lease. Just go into Landlordology/directory. You’ll see a bunch of legal forms websites, all of which have pet addendums you can buy. They’re not affiliated with us in any way, but we just think they’re a great service. Check them out. We don’t get any money from them. It’s just a recommendation.

I hope that helps. Thanks again. Bye.