Pet owners are having a big impact on the apartment rental market. Can you leverage your pet-friendly apartment community to be more competitive and profitable? We’ve rounded up some key points to consider including logistics, financial trends, and popular pet amenities.
Have you considered how your apartment community’s pet policy could be influencing the competitiveness of your rentals?
Increasingly, we're seeing how pets are becoming a priority in people’s lives. Not only is this shift affecting logistical concerns, such as having spaces for dogs to run, but the shift in priorities is also changing how people spend money. The estimated economic impact of pet ownership in 2018 is $72.1 billion; that’s a 67 percent increase in the past decade.
Are you curious about the impact of pet owners on the rental marketplace? Let’s look at the numbers to see what’s at stake and how you can strategize to accommodate this growing demographic. And, take a look at the infographic below for a summary of pet-friendly trends and download a print-friendly version to share with your office, or copy and paste the code below to share the infographic on your site!
Characteristics of Renters with Pets
The American Pet Products Association (APPA) reports that 68 percent of all U.S. households own a pet. That equates to 89 million dogs and 94 million cats!
In the 2017 National Multifamily Housing Council (NMHC) Renter Preferences Study, over 89,000 renters reported that they owned pets. Specifically, 71 percent of those pet owners have dogs, 35 percent own cats, and four percent owned another pet type. (Note that the sum of the percentages may total more than 100 percent due to multiple responses).
While market information from NMHC can provide indicators of the demand, we were curious about the apartment rentals that were most desirable. To better understand what renters with pets are seeking, we aggregated and analyzed search data from Apartments.com.
This analysis revealed that among renters searching on Apartments.com, dogs are still significantly more popular than cats. Of those who refined their search using pet-friendly filters, 74 percent of searches were for dog-friendly apartments and 26 percent of searches were for cat-friendly apartments. The data also revealed that pet ownership is linked to geography. Below are the top cities for pet-friendly apartment searches.
Cities with the highest pet-friendly search volume on Apartments.com:
Pet Policies Can Add to Your Marketing
The data from the NMHC survey also reveals that information about an apartment’s pet policies is a critical component in a renter’s decision-making.
When asked to indicate the importance of a community's website features, 59 percent of renters say that reviewing pet policies online was an important part of their apartment search.
One third of renters (33 percent) say that a community’s pet policy helped them decide to visit a community. That puts the impact of pet policies nearly on par with the impact of online ratings or reviews.
So, while you may have previously considered your pet policy to be behind-the-scenes paperwork, this insight shows that your policies can be an important part of your marketing.
The following are some best practices to keep in mind when developing your policy.
Creating a positive, pet-friendly community starts with a thorough screening process. Screen each resident and get references. Also, screen the resident's pet. Meet the animal, assess its temperament, and obtain vet records. Some communities choose to require that the pets be spayed or neutered.
Increasing your revenue stream from offering pet-friendly apartments is done by charging a recurring pet fee or increasing the total rent. You can also collect a larger security deposit or pet deposit to mitigate the risk of pet-related damage. Be sure to follow your state’s laws on the amount that’s allowable and if the deposit must be refundable.
Paperwork is also a necessary part of pet-friendly apartments. Add a Pet Addendum to the lease and detail approved animals, noise and cleanup guidelines, vaccination requirements, and damage rules.
How to Be ‘Top Dog’ with Pet-Friendly Add-ons
On average, 70 percent of property listings on Apartments.com are pet-friendly. To stand out, many communities are enhancing their pet amenities and services.
Knowing the impact that pet ownership is having on the marketplace, it’s worth considering pet-friendly amenities as a means to attract pet owners and get an edge on the market.
The NMHC report revealed a few pet-friendly amenities that are of interest to renters along with the renters’ estimations of rent increases for having access to the amenity.
Trending Pet Amenities and Estimated Monthly Cost
Community Dog Park: 45% $28.65/mo.
Community Pet-Washing Station: 37% $26.48/mo.
Pet Daycare Service: 33% $33.24/mo.
Dog Treats in Lobby: 29% $21.70/mo.
Pet Walking Service: 27% $30.57/mo.
Where information was available from 2015, these amenities showed an average increased interest of eight percentage points. So, even in a few short years, the impact of pet ownership has grown significantly.
In addition to the amenities listed above, we have some suggestions for ways you can add value for pet-loving renters. Consider hosting “Yappy Hour” pet play-sessions so that both pets and residents have a chance to connect. Think about installing pet waste stations to make it easier for pet owners to clean up after their pets. Offer the option to install cat perches in apartments so cats will feel right at home from their high vantage point. Arrange for a group pet insurance buy-in option for residents. If you don’t have space for a dog park, get creative by looking to your rooftop as a possible site.
Benefits and Considerations of Pet-Friendly Apartment Communities
The above trends have probably convinced you that there's a potential opportunity with pet-friendly apartment rentals. Let’s consider some of the ways you can benefit from becoming more pet-friendly.
First, allowing pets in your apartment community gives you access to a larger pool of potential residents. This can shorten your apartment turnover rates and decrease your vacancy rates.
Offering pet-friendly apartments can also result in increased resident retention due to higher overall rental satisfaction. While an often-overlooked component of marketing, improving resident retention is a valuable way to maximize revenue.
Pet-friendly apartment rentals could also increase your monthly income potential. Some communities add on pet fees whereas others charge higher rental rates.
The additional revenue can add up in a big way. For example, say you have an apartment community of 100 residents and 50 percent of them chose your community because of its pet-friendly approach. If these residents expected to pay $21.70 extra per month for dog treats in the lobby, that could increase your annual revenue by $13,020.
While the potential benefits are large, it’s also important to consider some potential risks. For example, allowing pets could result in property damage or additional wear and tear. This risk can be countered by requiring a larger security deposit or additional pet deposit.
Another point of consideration is that allowing pets could have insurance implications due to related damages from scratching, digging, odors, and more. This is typically defined in your pet policy and possibly covered in the pet deposit. Check with your insurance provider before implementing new policies.
Lastly, when allowing pets, there's the potential for noise problems and complaints. In fact, NMHC reports that 50 percent of residents indicated they were less likely to choose a pet-friendly community because of pet-related noise. Your paperwork can help mitigate this by having clearly defined rules about barking and noise complaints. Include this information in your pet policy so that pet owners are aware of their responsibility as well as in a lease addendum so that all tenants are aware of noise ordinances.
The Pet-Friendliest Apartment Site
We recognize the prevalence of pets in apartment communities far and wide and celebrate our love for man’s best friend (and cats, birds, and so on). In fact, we developed Apartments.com/pets, an online resource dedicated to helping pet-loving renters find a pet-friendly apartment, and we partnered with the Petco Foundation to make sure renters can also find the perfect apartment-friendly pet to adopt.
To celebrate, we’re kicking things off with the #ChangeAPetsWorldSweepstakes! Share the sweepstakes with your residents and prospective renters for a chance to win Petco gift cards and prizes from the Petco Foundation to pamper those pets! For entry details, visit #ChangeaPetsWorld Instagram Sweepstakes.
As always, stay in the loop about current multifamily real estate trends and marketing solutions by visiting apartments.com/advertise.