Individuals and families who aren’t willing to pay inflated real estate prices may look to the rental market, but are they turning down your IRA-owned rental property before they even get a chance to see it? A “No Pets Allowed” clause in your listing could be turning your potential clients off in higher numbers than you may think, and having a change of heart in this regard could be a key step in changing your fortunes.
According to ThinkRealty (citing a study by Harris Research), 87% percent people who recently bought houses took the needs of their pets into account when making their final decisions. Nine out of ten buyers under age 35 reported owning pets and 63% of buyers age 55 or older reported the same, suggesting a significant demand for pet-friendly premises among those on the hunt for their next dream home.
The study cites buyers not renters, but it stands to reason that prospective renters may take the same approach when considering their options. Investors who hold rental property in their self-directed IRAs may want to think about this, especially if they’re having a hard time filling their units. Pet owners often regard their furry friends as members of the family, so an otherwise favorable rental opportunity simply won’t do if it can’t accommodate the needs of the entire family. You can set yourself apart from your competition by welcoming your new residents and their fur babies with open arms, all for the benefit of your self-directed retirement.
The messes, smells, and damage to paint or carpet that can occur at the mischievous paws of dogs or cats are compelling reasons to disallow pets, as their lingering effects may dissuade future renters. However, you may be well positioned to address these issues while maintaining your overall real estate IRA strategy. Just as any income from an IRA-owned property must flow back to the account, any expense incurred by your self-directed investment must be paid by the account as well. This means you’ll never pay out of pocket for repairs or cleaning services (which your IRA might be paying for anyway if the property is between tenants) as a result of pet misdeeds. In turn, your IRA could enjoy a boost once you begin catering to the needs of the pet-owning majority that seems to comprise the market.
It can pay to examine every possible factor when attracting the renters that could help build your retirement. For more information about owning real estate with an IRA, self-directed investing, or your full spectrum of alternative IRA investments, please don’t hesitate to contact New Direction Trust Company at 877-742-1270 or firstname.lastname@example.org.