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The statistics on U.S. pet ownership vary widely. As reported by The Washington Post, the American Pet Products Association reports that 68% of households include pets, while the U.S. Census Bureau puts that number at just 49%. However, the Census Bureau’s American Housing Survey uncovered that more American households are likely to include pets than children under the age of 18, as the share of households with kids is at 27%.
Given these significant estimates of pet ownership in the U.S., investors in residential real estate should be wondering how they can hit the spot with the growing demographic of pet owners. A few property upgrades — such as replacing carpeting with ceramic tile or other pet-friendly flooring, sticking to pet-safe lawn products and including pet-friendly features such as a cat/dog door and adjustable showerheads for pet bathing — can help attract the 87% of home buyers with pets who “said they took their pets’ needs into account when searching for a home,” according to a Realtor.com survey. With 45% of pet owners wanting a large yard and 36% wanting outdoor space, installing fencing could also boost a property’s attractiveness to this buying and renting segment. To target the pet parents themselves, investors can provide information about local services such as pet sitters and dog walkers, plus leave pet-centric gifts such as toys and treats upon move-in.
These costs might seem over the top at first glance, but there are benefits to catering to pet owners. One study suggests that offering pet-friendly rentals “can actually increase [investors’] bottom-line profits.” According to research conducted by FIREPAW, Inc., a animal welfare nonprofit research and education organization, vacancy rates for pet-friendly rentals were lower than in housing that prohibits animals. The length of tenancy was an average of 28 months longer in pet-friendly rentals, and landlords spent less than half as much money advertising pet-friendly units.
Adding to the bottom line is the ability to charge a separate pet deposit, which the research found to be, on average, between 40% and 85% of the rent, as well as higher rent overall, between 20% and 30% of the average rent. So by allowing pets, landlords actually saw a net increase of $2,731 per unit annually.
One reason that some landlords cite in not allowing pets is the concern about property damage, but the FIREPAW study determined that even the worst cases of damage cost “far less than the average rent or the average pet deposit,” and there is “little if any difference in damage between tenants with and without pets.” In fact, the study actually determined that tenants with pets cause much less damage than tenants with children.
But investors aren’t the only ones with work to do in making sure a property is a pet owner’s right choice. Pet owners have plenty to consider when searching for a property to buy or rent, such as nearby doggie day care options, dog parks, pet-friendly retailers and restaurants. Hopeful buyers and renters should also determine whether the property has a fence and, if not, whether they are allowed to build one and how much it would cost. If choosing a high-rise, pet owners should consider whether the dog is comfortable in elevators, as well as what the pet policies of the condo or homeowners association are and whether they can meet them.
With pet ownership on the rise overall and 90% of dog owners indicating in the Realtor.com survey that their animals’ needs were essential to their decision of purchasing a home, investors could tap into a lucrative market by making a few upgrades to existing properties. Between the increased income, increased length of tenancy and increased tenant pools and market size, the benefits of allowing pets seem to “pawsitively” outweigh the risks.