Setting a Pet Deposit for Rental Property
Here's how to make sure that you're setting the right deposit for your property.
When Did You Install Carpet?
Carpet depreciates over a 10 year period. The problem with pets is that they can have accidents that won't necessarily be seen in the carpet itself, but can be seen in the subflooring underneath. If you have just installed the carpet, then you'll need to factor your depreciation rate into the deposit in case the entire carpet needs to be replaced.
What Kind of Trim Do You Have?
One of the most common places for damage to occur in a home with pets is on the trim around the floor and on the window sills if they are made from wood. These wood items are softer than the wood you'd find on a floor and are at risk to experience scratching the instant a pet puts a paw on them. In your security deposit evaluation, you'll need to consider how much it would cost in materials and labor to replace these items with the appropriate depreciation included.
Do You Have a Deck?
there is a deck on your rental property, it is very common for renters to place their pets outside on them – even in apartment complexes. For cats, this isn't much of an issue, but dogs can create a lot of damage. From chewing the wooden railings to urinating on the wood to make it soft and unusable, you'll want to fully document through pictures the condition of the deck and incorporate repair costs into the pet deposit.
What About Landscaping?
Pets can quickly damage landscaping that cost thousands to install. Although there is also depreciation included with these features, if a dog digs up your yard or breaks up the stone retaining wall you put in, you'll need to determine how much money you'll need to repair potential damages.
When you're creating a pet security deposit amount, it is also important to keep the amount as affordable as possible. If you're charging $1,000 per month in rent and an equal amount in a normal security deposit, you won't get many takers if you're charging another $2,000 for a pet security deposit. Consider instead charging a specific amount per pet that the tenant has. A general amount of $300-$500 per pet won't drive people away.
If you're concerned that you won't get enough return on your investment if you allow pets on your property, you might also consider charging an additional amount in pet rent to pet owners. A small increase, such as $25-$35 per month no matter how many pets someone may have, will help you to cover losses IF you set these extra amounts to the side while the tenant is occupying the property to pay for repairs. If none are needed, then you have extra profits.
Pet deposits can help protect your property and make it more marketable. Develop your own policies and procedures to take advantage of this demographic today.
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