Is a Jack Russell better than a large deposit?

LANDLORDS.  Have you ever considered that maybe a Jack Russell is better than a large deposit?

Did you know that with effect from 1st June 2019, the Tenant Fees Bill will finally become law and part of this legislation will result in a tenant’s security deposit being limited to 5 weeks’ rent?  And, it might be less than this.  Having spoken with a number of landlords about this, we’re being told regularly that the result will be that they will no longer accept pets.  At all. This has got us thinking.

Have you ever wondered how many tenants have pets?

Some 42% of the UK population have pets of one sort or another and the tenant fee ban is unlikely to affect this.  And as a result, a landlord would be well advised to re-visit his stance on pets.

A landlord’s blanket ban on pets will likely have two effects: first of all, there may well be an increase in the surreptitious presence of pets in properties.  A tenant may well not admit to having a pet and if they are not in breach of their tenancy agreement in any other material way, it might prove to be very difficult to encourage a tenant to get rid of a pet or in the extreme, for a landlord to easily regain possession of his property.  Just imagine the relationship that is likely to exist under these circumstances.  A landlord will quite rightly feel conned and aggrieved and this is absolutely no way to start a tenancy on the right foot.

The second effect will be that those landlords with a blanket ban will undoubtedly take longer to let their properties and at any time when there are lots of properties to choose from, this will be even more pronounced.

Do you want to let your property faster and at a higher rent?

Without any shadow of doubt, a landlord who is prepared to consider pets will receive more interest in viewings for his property.  Just look at the number of property adverts that contain the caveat “no pets”.  Then look at the really small number that specifically say “pets accepted”  (if you can find any that is).  Those adverts which are silent on the matter you can pretty much guarantee are for properties where the landlord will not take pets.  Were they to be happy to accept a dog or a cat, the advert will absolutely say so.  And the reason for this is two-fold.

Properties taking pets will rent much more quickly. 

Whilst it’s difficult to quantify exactly how much more quickly, we very rarely have an empty property where the landlord will accept pets.  But, when the market is a little slow, it is not entirely unusual for a property that won’t accept pets being empty for a week or two longer than necessary.

Properties taking pets will attract higher rents.

What is perhaps not fully understood by a landlord is the fact that where a tenant may offer less than the asking rent on a property that won’t take pets, this is rarely the case where a landlord will accept them.  This is simply because the tenant with a dog understands that it is almost always a seller’s market.  Indeed, the price of a property taking pets is probably already higher than its counterpart that won’t.

Are you still of the opinion that pets really cause lots of damage?

A landlord who has a cat or a dog understands the truth and that is quite simply that the vast majority of pets don’t cause too much damage.  The vast majority of tenants with pets are sensible and caring pet-owners and ensure that their pets are adequately walked and entertained; it is often the bored pets which are responsible for damage.  Furthermore, the majority of properties in Basingstoke are let unfurnished and in such properties, it is the tenants own belongings which are likely to be on the receiving end of any damage.

Those tenants with anti-social pets that we read about in the press are actually very unlikely to become tenants in a property being sensibly managed.  They are pretty unlikely to pass the necessary referencing checks and most agents will have cut them off at the pass.  Most landlords and agents have a default position of wanting a “quiet life”.  You may define this as the rent being paid on time, the property being well cared for and the neighbours not continually moaning about a tenant’s behaviour.  There is always an element of those applying for a tenancy who it is suspected will not allow this “quiet life” to exist.  Were they to have a pet, it’s probably more likely to fall into the troublesome category.

Ironically, the vast majority of landlords will accept children, often at a rent that has been negotiated down.  I would hazard that the majority of our tenancies involve children.  I genuinely cannot remember the last time we had a problem with a tenant’s cat or dog, but there are often minor marks to walls and sometimes significant amounts of drawing upon walls.

What tangible evidence is there to substantiate pet owners making good tenants?

The vast majority of tenants are concerned about the prospect of being able to get a good positive reference when they are leaving.  This is especially true of a pet-owner, since as we have already established, there is far less available to them when they move on and they need to make certain that their application is viewed in the best possible light.

In general, when a tenant leaves a property it is not uncommon for there to be minor cleaning issues.  There may be a dispute over the issue, but it is invariably sorted out without too much difficulty and the cleaning is invariably infinitely less than the value of the deposit.

Out of the last 300 check-outs conducted by us, there were over 200 cleaning issues which involved our intervention and a (usually relatively minor) claim being made against the deposit.  Don’t panic, this is an industry-wide irritant which is very easily put-right.  Of these, however, there were only two which involved tenants with pets.  In percentage terms, there are far fewer issues at check-out from tenants owning a pet.

A good tenancy agreement will have clauses which make a pet-owning tenant responsible for the thorough cleaning of all carpets and soft-furnishings with treatments appropriate for homes which have housed pets and a tenant will need to provide evidence of this.  And, this is invariably fully adhgered to because the tenants need a good reference.

So, the question was: Is a Jack Russell better than a larger deposit?

Given that deposits are about to be limited, the magnitude of the deposit is perhaps irrelevant.  The real issue is just how much will accepting a Jack Russell benefit the landlord.

It’s probably better to put some figures into a hypothetical, but realistic equation.

There are 10 seemingly very similar properties on the market for £1000.  Only one will take a pet.  Nearly 60% of the applicants will try to get the nicest one for less money than it is being advertised for.  They will look at a number of them and take a few days making a decision.  Maybe the lucky applicant will be accepted at a rent of £975.  And, if a landlord hangs out for the full £1000, it might take a while get an application at the full £1000.

Someone with a pet will view the one which will take pets and offer the full asking price immediately.  He has no choice and understands this.

But, were that property to have been marketed at £1025-£1050, the applicant would still view it and in all likelihood still offer the asking price.  

In fact, on many occasions, someone with a pet has viewed a property where pets haven’t been mentioned in the advert and actually volunteered a higher rent because they have a pet.

And, in our experience, tenants with pets tend to stay longer.

At £50 over the market rent (£1025- £975), that’s an additional £600 per annum in rent.  If the tenant stays for two or three years, that’s up to an additional £1800 over and above the rent paid by a tenant without a pet.  That’s significantly more than the value of the larger deposit for which a landlord has to prove he has a claim at the end of the tenancy.

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