Aussies love their furry friends. 61% of Australian households own at least one pet, one of the highest rates of pet ownership in the world.
In fact, there are more pets in Australia than humans, according to Animal Medicines Australia.
But what does that mean for you as a property investor?
Yes, pet-friendly rentals require more maintenance, but banning pets could put off potential tenants. In some cases, it may not even be legal to ban them.
What should you do? As always, it depends on your circumstances but, in this blog, we’ll explore the impact, benefits, and considerations of allowing pets in rental properties.
Trends in Pet Ownership and Rental Market Impact
The market trend is increasingly for gen Z and millennial renters who are unwaveringly attached to their pets. As many as 80% of millennials in Australia are pet owners, according to the RSPCA.
Pets even take priority over family. 75% of younger pet owners take as many photos of their pets as they do their families. 90% say they prefer spending time with their pets.
The pandemic drove more pet ownership too. Younger workers, used to home working, have taken advantage by acquiring pets that might have been impractical with a long commute. Many are unwilling to move if the pet can’t come with them.
As a landlord, if you cater to that market, it gives you a significant advantage, especially in the urban and suburban areas.
What Does the Law Say About Pets in NSW Apartments?
If your property is in New South Wales, you might not realise that a blanket ban on pet ownership in apartment buildings is now illegal under NSW strata-scheme laws.
It’s not that you must automatically allow pets, but it does mean that you can’t ban them without good reason.
For example, if your building is not currently pet-friendly, strata approvals may still apply. Even if your building is pet-friendly, owners may still need to provide written notification or seek consent from the building’s owners’ corporation for a tenant to keep a pet.
Nonetheless, simply banning pets because you don’t want them may not be allowed.
But should you even be thinking that way? Let’s look at the benefits of pet-friendly rentals.
How Pet-Friendly Policies Impact Rental Income
Put simply, pet owners are willing to pay more to live with their pets.
Only 5% of rentals in NSW explicitly allow tenants to keep pets, according to Rent.com.au. The Rent.com.au figures also show 43% of rental listings make no mention of whether pets are allowed.
But pet owners fork out 30% more in rents in Melbourne’s inner city, and 12% in Sydney, Domain figures showed. That could add significant income to your cashflow.
Why do they pay more? It means they don’t have to go through the emotional turmoil of giving the pet away or having it euthanised. Alternatively, it means they don’t try to bring their pet anyway and hide it from you.
The Financial Upside of Being a Pet-Friendly Landlord
What does that mean in real money?
If you can charge an extra $50+ per week just for making sure your property is pet-friendly, you could add $2,600 to your annual rental income.
Increased demand from potential tenants could also reduce your turnover and vacancy rate.
Imagine Sarah is a property investor with a strata scheme apartment in NSW. Previously, the Owners’ Corporation banned pets. Now, partly due to the new laws, they want to make the building pet-friendly:
- The Owners’ Corporation identifies $6,000 of upgrades needed to make communal areas pet friendly, split between 15 owners.
- They also agree that the building will need $250 more per month spent on cleaning.
- Sarah estimates an additional $500 per year in cleaning cost for her apartment.
- As a result, Sarah can charge $60 more per week in rent.
That’s a one-off cost of $600, an annual cost of $750, and a rental income that increases by $3,120 annually. Are pet-friendly rentals more profitable? They certainly can be.
The Pros and Cons of Allowing Pets
Still making up your mind? Let’s lay out the pros and cons:
Pros of Pet-Friendly Rentals
- Higher rent and higher demand.
- A broader tenant pool, including more wealthy, millennial professionals.
- Better tenant retention and lower vacancy rates.
Cons of Pet-Friendly Rentals
- Risk of property damage.
- Noise complaints from neighbours.
- Increased maintenance costs for damage and cleaning.
There are ways around these issues. Pet bonds give you some insurance against damage, or you can screen tenants to identify pets likely to cause problems. You can also include a tenant’s obligations regarding pet ownership and behaviour in the lease terms.
How to Draft a Pet Agreement for Your Lease
If you decide you want a pet agreement in your lease, make sure you include:
- Types of pets allowed: dogs and cats, but no wallabies, for example.
- Noise and maintenance responsibilities: you can bring your pet but keep them quiet, and repair damage.
- Flea treatments: Agree a regular timetable.
- End-of-tenancy cleaning: Set out specific cleaning duties required of tenants before moving out.
The aim is to have clear expectations, fewer disputes, and well-defined responsibilities. You’ll likely find it helps to use a robust template or have a legal professional create one.
Legal Considerations Across Australia
As the NSW example shows, you need to ensure any rules you set out are in line with the relevant state regulations. If you need legal advice, speak to a legal expert, but the below gives you a rough idea:
- NSW: You can deny tenants permission to keep pets, but only if you have reasonable grounds to do so.
- QLD: Renters can request permission to keep pets, and you can refuse on reasonable grounds. Consent is implied if you don’t respond in 14 days; pet bonds and rent increases for allowing pets are prohibited.
- VIC: Renters need permission to keep pets, but landlords can only refuse with a valid reason, requiring an application to VCAT. Pet bonds are not permitted.
- TAS: Pets are allowed only with the owner's agreement or if stated in the lease, but guide dogs are exempt, and pet bonds cannot be charged.
- SA: Tenant pet ownership requires your approval, often accompanied by a Pet Agreement, and strata approval may be needed.
- WA: Tenants must obtain landlord permission to keep pets, with landlords allowed to charge a pet bond up to $260, excluding assistance animals.
- ACT: Tenants can request consent, and consent is implied if you don’t reply within 14 days. Reasonable conditions are allowed without ACAT approval.
- NT: Tenants must notify landlords and wait 14 days for any objection or application to NTCAT, after which the pet is allowed. Pet bonds are not permitted.
As you can see, the property type has a big impact here. If you’re in a strata property, it’s best to consult your owners’ corporation to make sure you’re on the same page.
Practical Considerations for Landlords Allowing Pets
Now that you understand the regulations and potential benefits, the final step is to evaluate the practicalities. Consider:
- Property type: Strata or standalone house?
- Noise levels: Are neighbours likely to complain about a barking dog?
- Shared spaces: Are common area pet-friendly or do they require modification?
Features like enclosed yards, pet doors, or proximity to green spaces are good signs that your property might be a prime candidate for pet-friendly renting.
A Landlord’s Best Friend?
Allowing pets requires some thought. It’s always important to know if you have the right to deny your tenants permission to keep pets, but at the same time allowing them could be a positive business decision.
FAQs
1. Do landlords in NSW still need approval to allow pets in apartments?
Yes, strata approvals may still apply in some cases.
2. How do I minimize property damage from pets?
Request a pet bond, conduct inspections, and set cleaning requirements in the lease.
3. Are pet-friendly rentals more profitable?
Yes, due to higher rent premiums and reduced vacancy periods.
4. Can I limit the number or type of pets?
Yes, specify pet size, breed, and quantity in your lease.
5. How can a pet agreement benefit landlords?
It clarifies expectations, reduces disputes, and protects your property.
