Property Management Growth with DoorGrow DGS 180: Allowing Pets vs. Not Allowing Pets In Property Management With Logan Miller Of OurPetPolicy
As a property manager, do your clients and owners allow pets? Do you encourage them to? There is an opportunity to create an additional stream of revenue and avoid fraudulent ESA letters by doing something so many owners are afraid of… allowing pets.
This week, property management growth expert, Jason Hull is joined by Logan Miller of OurPetPolicy to discuss the ins and outs of animals in rental properties and why allowing pets can actually be more beneficial for owners and tenants alike.
You’ll Learn…
[01:31] OurPetPolicy’s Mission and Why they Started
[04:00] The Big Issues with Not Allowing Pets in Rental Properties
[08:06] Reducing Fraudulent ESAs and Creating Better Tenants with Screening
[11:46] Keeping Track of Pet Problems with Mapping
[14:53] The Financial Gain for Property Managers
[17:02] Creating Effective Pet Policies and Rules
Tweetables“It doesn't seem to make a lot of sense if you're gonna cut out two-thirds of the potential client base in one fell swoop by not allowing pets. You're not gonna be able to get as many qualified candidates probably for that property now.”
“When, you know, there's less of a pool of tenants and a little sparse, it could take an extra month on average to find that right tenant, you know, if you're not allowing pets and that feeds back into the return on investment for the owner.”
“Either you allow pets or they will just bring pets or animals into the property and hide it from you-- is a very common scenario-- and most people would rather be honest.”
“It's just another revenue stream that property managers can add is to make sure that they're tacking on pets and people are very willing to pay pet rent or to pay additional fees for a pet.”
Resources
Transcript[00:00:00] There was a property manager who had like over a thousand doors, and he said, "My best secret is I'm really good at convincing owners to allow pets." All right. We are live. Welcome DoorGrow Hackers to the #DoorGrowShow. If you are a property management entrepreneur that wants to add doors, make a difference, increase revenue, help others impact lives, and you are interested in growing in business and in life, and you're open to doing things a bit differently, then you are a DoorGrow Hacker. DoorGrow Hackers love the opportunities, daily variety, unique challenges, and freedom that property management brings. Many in real estate think you're crazy for doing it. You think they're crazy for not because you realize that property management is the ultimate, high trust gateway to real estate deals, relationships, and residual income.
[00:00:46] At DoorGrow, we are on a mission to transform property management business owners and their businesses. We want to transform the industry, eliminate the BS, build awareness, change perception, expand the market and help the best property management entrepreneurs win. I'm your host property management growth expert, Jason Hull, the founder and CEO of DoorGrow. Now, let's get into the show.
[00:01:07] So today ,my guest is Logan Miller of OurPetPolicy, which you can check out at ourpetpolicy.com. Logan, welcome to the show.
[00:01:17] Hi, thanks Jason. Thanks for having me. Excited to be here.
[00:01:21] Cool. So Logan, give us a little bit of background on you as an entrepreneur and your journey into how you kind of got to the point where you decided to start something called OurPetPolicy.
[00:01:31] Yeah. Yeah, so it all started, um, back when I was 23, I purchased my first house and it was a duplex and rented it out and became my own property manager of that. And even rented to college couples, and I was surprised at how many of them being, you know, kind of poor college couples, had pets. And a lot of 'em, you know, would say it was an emotional support animal, and because I lived on the property, I didn't have to accept those. And so, they'd end up paying a $300 pet fee to have it. And typically they're, you know, six or 12 months. And it surprised me that they were willing to pay that, but they did. And eventually between me and family members, grew our portfolio and yeah. Actually just before COVID, you know, we had a no pet's policy on those properties as well, and it surprised me how many ESAs we had-- emotional support animals that we had.
[00:02:19] And we got to a point to where, you know, we really looked into it and there were over three fourths of our rentals-- it all had a no pet's policy-- had animals in them and it's like, man, there's gotta be a better way to verify these emotional support animal letters, and so we talked with other property managers, most of them, you know, just accepting the ESA letters. We found online there was lots of websites that sell these letters and we went and got the letters ourselves and surprised at how easy you can get 'em. Just check a box: "I sometimes feel stressed" and they say, congratulations, you qualify for an ESA letter signed by a licensed health professional. And so we, you know, worked with some lawyers and said, "Hey, there's gotta be a good way that we can shut these down, you know, as they're not legitimate" and figured that out and I was like, "Hey, I'll bet other property managers would like this as well," and so just started a business.
[00:03:08] Okay, so our topic today is allowing pets versus not allowing pets. So why don't we chat a little bit about that, and then we can talk a little bit about how you sort of helped solve this problem. But, I remember being at a conference and there was a property manager who had like over a thousand doors, and I asked him what, you know, maybe his secret is, right? If he has one. And he said my best secret-- and I think he was a property manager in Hawaii-- and he said, "My best secret is I'm really good at convincing owners to allow pets." And I said, "Really?" And he's like, "Yeah, I'm good at convincing them to allow pets because usually children cause more damage than pets do."
[00:03:47] And he said, "So I'm able to talk people into allowing pets, which allows us to rent out more property, more easily at a higher price point and just facilitate things. So that was kind of like his big secret that he wanted to share with me. So, what have you noticed about allowing pets versus not allowing pets? So let's chat about that.
[00:04:06] Yeah. Yeah, no, I a hundred percent agree. If you look at the statistics out there, they say between, you know, two thirds and even as high as 90% of renters have a pet-- or if you're being technically correct-- have an animal because you know, assistance animals aren't considered pets, right? So, over three forces of the renters are gonna have an animal, and you know, I think a lot of times owners are hesitant to allow those animals, you know, on their properties as they've seen, you know, worst case scenarios. But the reality is, looking at the tenant pool, so many of the tenants have animals that if you want a quick turnaround and be able to, you know, charge-- like you said-- a higher monthly fee, you know, you have to accommodate that.
[00:04:50] Yeah, it doesn't seem to make a lot of sense if you're gonna cut out two thirds of the potential client base in one fell swoop by not allowing pets. You're not gonna be able to get as many qualified candidates probably for that property now, but a lot of owners are really afraid of pets. They might not be somebody that has pets or maybe they're just a really terrible pet owner, and they've seen the damage they've allowed their pets to make, maybe. I don't know, but they're afraid or have this fear that: 'if I allow pets in this property, it's gonna be absolutely destroyed.' They're imagining worst case scenarios, cat lady house, full of cat urine, or, you know, dogs with some sort of razor claws like shredding everything and chewing up everything. Right. So with your clients in the past, how did you persuade them to like, let go of that fear or to help mitigate that risk?
[00:05:45] Yeah. And we see this with property managers that we work with. They've, you know, for 20 years have had a no pet's policy but will still have animal issues, you know, as they're getting lots of assistance animals, emotional support animals, service animals, and see that, 'Hey. We're really fighting against this and what, if we move to allowing pets, you know. More than half of them have animals in them already,' and so we go through and, and show 'em, "Hey, you know, first of all, you wanna have really good, specific animal rules and we can talk about those later, but you wanna make sure that those expectation levels are set high so that the tenants know what they're expected to do and to help mitigate that damage potential.
[00:06:28] And then we'll, you know, show 'em the return on investment that they see for allowing animals, which part of it could be renting out faster. Lately, with the rentals, especially around here in Idaho and where, you know, we're helping at, there's a large tenant pool and a lot of applications, and so they haven't seen that here in the past year or so. But when, you know, there's less of a pool of tenants and a little sparse, it could take an extra month on average to find that right tenant, you know, if you're not allowing pets and that feeds back into the return on investment for the owner.
[00:07:02] Yeah. Something else that has come up on some of our group coaching calls in relation to pets is that, you know, either you allow pets or they will just bring pets or animals into the property and hide it from you-- is a very common scenario-- and most people would rather be honest, but they're not gonna give up, you know, having a good place in a lot of situations just because of a pet, right? And they're not gonna get rid of their animal or their pets. And so, what ends up happening is they just hide them, and if they're hiding it. Maybe you won't even see the damage. Maybe there's no damage. Maybe they're able to hide everything really well, but also you're not able to charge pet rent. You're not able to make more fees. You're not able to maybe get some sort of additional deposit or whatever you might do to kind of maximize your fee structure and to reduce risk for the owner and the animals are still in the property. All right. So let's talk a little bit about OurPetPolicy. So what problem does this really solve? I'm curious.
[00:08:06] Yeah. And so like I mentioned earlier that first part where we started off with is, you know, those emotional support animal requests, right? And we see especially with, you know, the younger generation coming and renting, and they're used to finding all their information online and there's so many blogs and posts about emotional support animals, all these websites that are selling these letters, you know, have blogs, YouTube videos and say, "Hey, why pay pet rent?" "If you have a no pet's policy, you know, see if you qualify for an ESA letter and 95% of people do." And so it's really so easy to go get an ESA letter that they're coming in without the pet policy. So we solve that issue and we're able to flag those letters and say, "Hey, you know, would you like to turn it into a pet and pay that pet deposit" or, you know, for the owners that are like, "Hey, I absolutely don't want animals in my property." we help keep their pet policy and go that route, but we do see a lot more and more switching from a no pet policy the pet's allowed.
[00:09:08] And so that's kind of the one, the initial pain point we're solving. But the other thing too is, you know, as tenants come in, a lot of times the damage that their animals cause is because they're naive to their damage potential of a dog or of a cat and they don't know those best practices, and so our goal is to help educate those tenants, and so we have, what's called 'pet curriculum' for those tenants. So it goes through, they're getting a dog, maybe it's for the first time, maybe they've had a dog forever, but they'll go through this interactive training course that says, "Hey, here's the best practices for having a dog," and the common ways that they do cause damage and how to prevent it. And so our goal is to, you know, educate the tenants and make sure that they are responsible animal owners, and I think that, you know, for the owners makes them feel a lot better about having an animal on the property.
[00:09:56] But then it's good for the tenants too, because less damage to the rental is good for the tenant. It's good for the property manager, and it's good for the owner. So that's another way that we're--
[00:10:05] Probably good for the pet.
[00:10:07] So, we've had petscreening.com on our show before, and so I know lots of people listening have probably been using them or have used them before. So how does that compare? What's interesting to me that stood out is you have training material and education, which I don't know if they have that. But that's an interesting take is to also just level up the quality of the tenants in relation to pet care or taking care of their pets or the animals. I don't know if you've done some competitive research. I don't know if these two tools might be complimentary or if they're competitive. So maybe you can just touch on that real quick.
[00:10:40] Yeah. They've been around for a lot longer than we have. We've been out for about two years now, and they started in 2017. And really, you know, in January, 2020, HUD came out with, you know, new guidelines around emotional support animals and those online website letters. That was kind of really our pain point that we were seeing, and so we really took off after that to start with, and then, you know, we were like, "Hey, you know, there's a lot of other issues we'd like to solve with software, our goal is to help manage those pets, you know, from a to Z. So not just the screening side of it, you know, when they're applying, but we wanna have a relationship with those tenants all the way through with the property managers. We do a lot of consulting with the property management companies on best practices and what we're seeing as far as data.
[00:11:25] And like you said, the pet curriculum, we have a pet mapping tool to easily identify the animals. And so, rather than just being on the initial screening side, you know, we try to have a complete a to z pet management system. And so there's a little similarities between us, but in the end, a completely different business model and things that we're doing.
[00:11:46] Got it. So you do do some screening of the pets for prospective tenants and prospective, you know, animals in the properties. What is the mapping tool?
[00:11:59] Yeah. So it makes it real easy to identify the animals that are on the property, and so like in multi-family housing, you get a tenant, take a picture of an animal, send it in, you know, and that's part of our tool as well. The tenants can send in complaints on other tenants in the multifamily housing and it says, you know, "Hey, this dog was digging up the landscaping," or, "Hey, they didn't, you know, clean up after their dog. Here's a picture," and then you can, you know, search that dog real quick, put in the color of the dog, the breed of the dog, whatever, go through all the pictures of, let's say it's a black and white dog. It'll show you all the pictures of the black and white dogs, and you're like, "Oh, they belong in this unit. It's this tenant." And you can attach that complaint right to them, so it makes it quick that way.
[00:12:40] If it's single family housing, what's really nice about it is you can share that with the owners as well. And so if you've got an owner that, you know, maybe that was their house they raised their kids in, you know, they're renting it. They drive by, they keep an eye on it. Instead of them calling you saying, "Hey, I saw an animal in the window. Is it supposed to be there? Is it not supposed to be there?" Going back and forth, you know, they can have access to that, to the pet mapping app and they can look on there and see if that animal's supposed to be in there. If it's not, they can take a picture, submit it directly from there. And so what we're trying to do is, you know, cut down on, on the time spent needed for property managers to do that detective work and figure that out, so.
[00:13:15] That's clever. So if there's an owner that's like going to the property all the time, they probably should just be fired as client, but... all right. So that, that's really interesting. So the mapping tools probably could have been called the snitching tool, which is totally interesting. So I think that's cool. So you're able to map or connect the pet problems to a particular situation or like a particular unit. And now this doesn't expose-- allow neighbors to figure out which neighbor they are or where they're at or anything like that. It just allows the property manager to an identify who has the problem pet.
[00:13:51] Yep, exactly.
[00:13:53] Okay. Cool. Right. We don't want vigilante tenants taking action against a unit.
[00:14:01] Right. Yeah. Right.
[00:14:02] Okay, cool. So yeah, no, this sounds really interesting, and so do you have a background in technology? How did you decide, like, "I want to do this software stuff."
[00:14:11] Yeah, so actually my brother that is the co-founder and he's had a lot technology, you know, startup-- software based startups and businesses and exits. And so he had the software team already built out, and so he's the co-founder with me. So I pitched the idea and and he's like, "Hey, this should be, you know, easy to do. And there's a large market out there and let's go for it."
[00:14:35] Cool. So, can you tell us anything about, roughly about how this works financially, like pricing? Like, does this generally make property managers more money? Is this off set? Like, is this hard for you to sell? Is this easy to sell? Like tell us a little bit about that. I'm sure people listening are curious, so.
[00:14:53] Yeah. Yeah. So our basic fee, like a software fee is 75 cents per door per month. And we go back and show the return on investment with that. And obviously if it's a no pet's allowed policy, you know, it's harder to show that return on investment. But, when the owner looks at it and says, "Hey, it kept this many animals outta my property that I didn't want in there," you know, "Hey, that's well worth it," and especially the education aspect of it, you know, if they are gonna have animals in the property, making sure there is less damage, you know, is gonna turn into that as well. And one thing I also thought'd be good on here talking about allowing pets versus not allowing pets: one of the common discussions we get in with property managers is, you know, what do you charge for a pet deposit? What do you charge for a pet fee? What do you charge for monthly pet rent? And anyways, that's kinda where we go back to that return on investment as well. You know, as we're turning these fraudulent requests into pets paying pet rent is-- you know, if they do charge a pet rent, pet fee, pet deposit, that's where the return on investment, you know, Is huge.
[00:15:58] Yeah. Yeah. Cool. Yeah, it's just another revenue stream that property managers can add is to make sure that they're tacking on pets and people are very willing to pay pet rent or to pay additional fees for a pet. They would expect to, right? They just expect to. If they don't, they're like cool, but you know, they're willing to do it, so. I generally haven't heard people mention challenges or pushback from residents on having to do anything for each individual pet. So, yeah, and if you don't do it, I really think people are just gonna sneak 'em in anyway. They're just gonna do it. So I think there's a serious advantage for people being able to be skilled. So maybe something you wanna add in the future is since you already have the educational platform is you have some sort of video or educational material to sell property managers on the benefits of opening up that pet policy to allow pets and animals in the properties and something they could give to owners to convince them like, "Hey, this is a better way to go because if you don't, this is what generally happens and this is a better way to go and there could be more money involved."
[00:17:02] Yeah, and that's part of what we do, you know, helping 'em go from a no pets policy to allowing pets is we give the property managers all of that data and we go through and build out a custom animal addendum with them to show 'em, "Hey, here's what, you know, the tenants are gonna be required to do the rules that they need to follow and I think all property managers should have that, you know, in their animal addendum and have every tenant go through and read through those and sign it. And one common thing we see that's a problem with property managers is they'll have, you know, pet rules in there and those pet rules don't apply to assistance animals. And so assistance animals, you know, if it's not in there as an animal rule, it's called a 'pet rule,' then it doesn't apply to them. So make sure that all the rules that should be followed, whether it's an assistance animal, you know, or a pet, are listed out as animal rules.
[00:17:54] So, and you will help them put an effective pet policy in place that mentions animals.
[00:18:02] Correct. Yep. So we'll have, you know, there's a pet section that talks about the pet fees, you know, pet deposits and all that, and then pet restrictions, a lot of times, you know, dangerous breeds. There's a lot of, you know, maximum weight limits and et cetera, but then there's a whole nother section that's called 'animal rules' that all animals are expected to abide by.
[00:18:21] All right. So I'm looking at the FAQ on one of your sites here. So what are some of the questions that people typically have? This seems like a big one: do you have pet policies for every state that are applicable?
[00:18:32] Yeah. And so we're moving across the country, so we're available to be in every state, and we work with lawyers in every state, you know, as we go into 'em. So far we're in 20 states across the country, and it typically takes us just a couple of weeks to add another state, you know? And like you said, we go in there. We have the specific rules in there cause it's state by state, they'll have rules saying, "Hey, if you represent in an assistance animal fraudulently, you know, there's a fine for that, and we make sure and put that, you know, in the pet policy as well.
[00:19:04] Okay.
[00:19:05] And go through state by state, make sure we found some specifically cities or counties that have specific rules around not being able to charge pet fees and et cetera. And so we work with lawyers in each state to make sure that we're abiding by all those rules.
[00:19:22] So basically you're leveraging the rules and laws that are in each state. You're able to make the policy sound as scary as possible and leverage the rules and penalties that are possible or applicable.
[00:19:38] Yeah. We want to, you know, educate the tenant as well. Right. That, "Hey, there are laws against this."
[00:19:44] Yeah.
[00:19:44] And you know, you wanna be-- they should be honest, but then also know, "Hey, if you, aren't honest, you know, here's the possibilities of recourse, so basically another educational part of it.
[00:19:55] Right. So if they're gonna take the risk to be fraudulent or do the wrong things, they're more educated on that risk. So, okay, cool. Well, I think this sounds really interesting. I'm sure you'll get some people reaching out after they hear this episode. How can they find you? How can they reach out if they're a property manager that's interested in hearing more?
[00:20:16] Yeah. So our phone number's on our website, obviously, you can always call us. We'd love to talk to you. Send us an email to info@ourpetpolicy.com. We go to a lot of the state trade shows. We were just at Apartmentalize, so national shows. And so, yeah, we're getting out there, but feel free to just reach out to us at any time as well.
[00:20:37] So it's 'our,' O-U-R petpolicy.com.
[00:20:43] Yep. Yeah, ourpetpolicy.com.
[00:20:45] Perfect. All right, cool. So I recommend you check them out. Sounds interesting. I'll push maybe some clients your way and see what they think. And I appreciate you coming out and hanging out here on the #DoorGrowShow.
[00:20:57] Hey, thanks for the invite, Jason, I've enjoyed being here.
[00:21:00] Awesome. Anyway, Logan, appreciate you coming on the show. So check out ourpetpolicy.com and if you are looking for the best in growing and acquiring more doors and growing your business, check us out at doorgrow.com. We've got some really cool stuff that's coming down the pipeline that we are going to be doing for our clients. And we're really excited about this. So stay tuned. And until next time, to our mutual growth. Bye, everyone.
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