A property manager’s best friend in a low-yield market could be a tenant with a dog.
First National Real Estate chief executive Ray Ellis said accepting pet owners with good references could be the ideal solution to the problem of low rental yields.
“Capital growth has far outpaced rental growth nationally, and this has forced yields to record lows,” Mr Ellis said.
“Yet many investors refuse to consider applications from tenants with pets, despite research that shows some are willing to pay slightly more rent and that they tend to stay longer.”
According to Mr Ellis, landlords who flag their rental property as pet friendly have an exponentially better chance of getting their properties leased quickly.
“Because tenants understand how difficult it can be to rent a property with their pet, many are prepared to discuss the amount of rent they’ll pay,” Mr Ellis said.
“They often have references from previous real estate agents and landlords that make their application more attractive.”
Mr Ellis said property managers can take additional steps to protect landlord’s interests, such as adding specific clauses to the lease, requiring annual steam cleaning of carpets and negotiating a pet bond.
“Good tenants understand these are realistic trade-offs that help their landlord to feel more confident about their intentions,” he added.
According to Petcare Information Advisory Service, 66 per cent of Australian families have pets but only nine per cent are able to rent properties with their pet.
[Related: Dogs are a landlord’s best friend]