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Landlords Questions:

Should I Rent to Tenants with Pets?

One question seems to keep coming up from owners when I’m appraising a rental property, and that is, “should I rent to tenants with pets?”

There is a well-founded concern that pets will cause damage-dogs may bark, ruin the lawn, chew the deck and bury bones in the garden.

Cats may shred the curtains, spray in the house, make the whole garden a litter box, and fight with neighbouring felines, keeping everyone awake at night.

And rabbits will do what rabbits do, and before you know it the back yard resembles a Disney movie with cute bunnies everywhere….

The biggest obstacle currently is the change in how damage by tenants is viewed by the Tenancy Tribunal. With tenants keeping pets without permission of the landlord, and

allowing dogs or cats to cause damage, any owner would be wary of allowing pets anywhere near their valuable asset.

http://www.landlords.co.nz/article/5868/rental-damage-law-change-needed

So if there are so many negatives, why would any reasonable landlord want to rent to tenants with pets?

Despite some horror stories the evidence for allowing some tenants to have pets is clear.

As we all know, New Zealand is a nation of pet-lovers. With around 60% of Kiwis owning a dog, cat or both, and home ownership in decline, pet-friendly tenancies will be in demand.

Like any market, where there is demand there is opportunity.

If you are unsure if your rental home would be suitable for pets, here are some things to consider.

  • Are you experienced enough with animals, and comfortable asking prospective tenants for evidence their pets are registered (in the case of dogs) and neutered?
  • Are you able to ask previous landlords about whether there was pet damage, and what was done to rectify this?
  • Are you willing to restrict the pet/s to only those identified by the tenants at the start of tenancy, by name, breed, and photo. And to require tenants to get written consent for any new or replacement pets?
  • Are you planning to renovate the home in the next few years, replace carpet, curtains and paintwork? If so, some very minor wear and tear may be acceptable until your rental is refurbished.
  • Is your rental home fully fenced and secure for a dog, and is there separate access to the front door for visitors?
  • If you’re not keen on a dog or cat, would you consider a rabbit, guinea pig, birds or fish? All these can be much loved family pets.

The upside of allowing tenants with pets to rent your home, is the improved stability of the tenancy, and often an increased return. Tenants with pets are often willing to pay a little more to secure a home, rather than give up part of their family. While it’s not currently possible to charge a pet bond as such, it is permissible to charge a higher rent to pet owners, where the market will allow.

As with many nightmare tenancy scenarios, good tenant selection is the key.

From our experience, a stable and sound pet owning tenant will pay rent on time, take care of the property, and want to stay long term, keeping your investment property providing much more attractive returns.  

If you would like to discuss your rental property and your ideal tenants, email Kim at Ruby Housing on office@rubyhousing.co.nz or call +64 3 379-5033 for a complimentary appraisal.

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What is your property investment plan?

May 10th 2017

 

 

Often we get a management request from a new landlord who has purchased or inherited a property, or perhaps has their own earthquake damaged home still after being paid out and moving to a new build. Being new to the investment game, and hearing conflicting advice about what to do can leave a lot of uncertainty about what the best long term plans should be for the property.

The reason this is important is it can affect the way the property is marketed as a rental, what maintenance or improvements are carried out, including how to much to spend, and what tenants are best suited to the property.

So here are some things to consider, bear in mind it’s worth reviewing your portfolio from time to time anyway.

  1. Do you intend to keep the property long term (5 years or more), or sell in the next 12-24 months?
  2. Is the property held in a family trust, by an individual, or in a company? How will holding or sellig the property affect the financial and tax implications for all involved?
  3. Who are your ideal tenants; young families, singles, professional couple, retirees, students, new migrants (to Christchurch or New Zealand)? Any other parameters?
  4. Are you happy to have pets in the home? Pet owners as tenants tend to stay longer and be keen to keep on the right side of the Landlord or Property Manager, because they understand it can difficult to rent elsewhere with animals.
  5. What about smokers? Inside or outside only? Some owners of earthquake damaged but liveable homes have made an exception to the outside smoking rule, as the house will eventually be demolished.
  6. Do you have a maintenance schedule for the property?And have you set funds aside for regular work to be carried out? If you’re not practically inclined, get advice on recommended and necessary servicing and preventative maintenance, as well as repairs as needed. The minimum we would recommend while a property is tenanted is annual heatpump and/or log fire servicing, gas fitting servicing if applicable, six monthly garden maintenance (pruning trees and shrubs), waterblasting paths and driveways, and clearing gutters six monthly.
  7. Have you had a rental property before? Did you manage it yourself or have a property manager? What worked well or not so well with that process?
  8. What is most important to you in having a rental property? Regular income, providing a home for people, being hands-off (no more late night calls!), an investment for your children or grandchildren, having someone else look after maintenance, knowing the property is being looked after while you live elsewhere, future wealth due to capital gain, letting someone else look after the detail of open homes, reference and checks, inspections, and all the day to day of a rental home? Anything else which is really important to you?

There isn’t one right or wrong answer; instead it depends on your own stage of life, risk profile, and appetite for stability or change. Get plenty of advice from people you trust who are also experienced in property investment, accountant, lawyer, financial adviser, CPIA, and of course your trusted property manager!