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A regional property manager received an audit report. 6 months prior the company had rolled out a new product on a 6,000-unit portfolio. This new product detects ESA fraud and missing pet revenue. The numbers in the audit shocked him: according to this new report, he had found $220,000 in pet revenue over the last 6 months that was previously being missed.
This isn’t a one-off case. Across the property management industry, companies are silently losing pet revenue and they don't even realize it. The culprit isn't necessarily fraud, it's a combination of illegitimate assistance animal claims, inconsistent policy enforcement, and operational blind spots that add up to substantial losses.
If you manage 600+ units, there's a strong chance you're losing $50,000 or more annually to these pet-related gaps. Here's how the math works—and what you can do about it.
The Pet Revenue Equation Most Property Management Companies Get Wrong
Property managers understand pet fees conceptually. Charge pet rent, collect deposits, done. But the actual math reveals a more complicated picture.
Consider a 350-unit property with typical occupancy. Nationwide data suggests that this property would have roughly 114 pets and 26 assistance animals. With pet rent averaging $35/month and one-time pet fees typically being $300 each, that's significant revenue potential:
• 114 pets × $35/month × 12 months = $47,880 in annual pet rent
• 114 pets × $300 one-time fee = $34,200 in pet fees
• Total potential pet revenue: ~$82,000 annually
Now here's where it gets interesting. What percentage of those pet-owning residents are actually paying pet rent and fees?
The answer varies wildly based on 3 factors: assistance animal claims, unauthorized animals, and missing pet fees.
How Unreliable Assistance Animal Requests Create Revenue Leakage
Under the Fair Housing Act, property managers cannot charge pet fees, rent, or deposits for legitimate assistance animals, (assistance animals include service animals and emotional support animals, also known as ESAs). When a property manager grants an accommodation request for an assistance animal, no pet-related fee, deposit, or rent is charged for this animal.
Many pet-friendly communities offer amenities like dog parks, waste stations, and pet-washing facilities. These amenities help communities support animal owners while creating a cleaner, more resident-friendly environment, but they do come at a cost. Because fees cannot be charged for assistance animals, the operational costs associated with pet amenities are absorbed by the property rather than offset by pet rent. Since these costs are waived for residents with assistance animals, only residents with household pets are charged for these amenities.
The challenge is verification.
ESA documentation has become remarkably easy to obtain online. Many websites offer letters from licensed healthcare providers for anywhere from $50-$200, with minimal to no contact between the provider and customer who receives the letter. Most of these sites even offer a money-back guarantee, highlighting the confidence these companies have that the letter will appear to be compliant, or a full refund will be issued. While many ESA requests are legitimate, 2025 data shows that an average of 61% of all requests are backed by insufficient or unreliable documentation, most of which come from these fraudulent letter mill websites.
Here's how the revenue leak happens:
Scenario 1: No verification process
A resident submits an unreliable ESA letter that was purchased from an online ESA letter mill. Without a process to identify this unreliable documentation, the property manager accepts it at face value and the resident pays no pet fee or pet rent, resulting in up to $700 in lost annual revenue.
Scenario 2: Inconsistent enforcement
One property in your portfolio has a manager with a rigorous ESA review process, while another property’s manager takes a relaxed approach. The inconsistency creates both compliance risk and revenue variability across each property.
Scenario 3: Documentation gaps
A resident signed a lease without disclosing they have a dog and a cat. Days before move-in, they provide an ESA letter from fast-esa-letters.com and the leasing agent approves the animals as ESAs, but doesn’t add them to the Property Management Software (PMS). This scenario is incredibly common, and the effect on the property is more harmful than expected. Animals aren’t accounted for, a fraudulent ESA request passes through, and lost revenue accumulates month after month.
Multiply these scenarios across hundreds or thousands of units, and you begin to see how $50,000 becomes a conservative estimate.
The Compliance Tightrope
Here's the part that makes this genuinely difficult: property managers are caught between two legitimate concerns.
On one side, fair housing compliance is non-negotiable. Denying a legitimate assistance animal request—or asking inappropriate questions—creates significant legal exposure. The penalties for a single fair housing violation can reach into six figures, and the reputational damage is severe.
On the other side, accepting every ESA request without appropriate verification isn't just a revenue problem.
The solution isn't to make the process more difficult, nor challenge more ESA claims from residents with legitimate needs. The solution is a verification process that's both compliant and thorough—one that protects the rights of those with legitimate disabilities, while ensuring documentation meets legal standards.
This is where most property management companies fall short. They either have no process (accepting everything) or an inconsistent process (creating compliance risk). Both approaches leak revenue.
What High-Performing Property Management Companies Do Differently
Property management companies that maintain healthy pet revenue collection share a few characteristics:
Standardized verification workflows.
Every assistance animal request follows the same process, regardless of property or site manager. This consistency protects against fair housing risk while ensuring legitimate verification.
Third-party documentation review.
Rather than asking site managers to evaluate medical documentation (which creates liability), they route ESA requests to qualified reviewers who understand fair housing requirements.
Portfolio-wide visibility.
They track pet revenue metrics across all properties, identifying anomalies before they become six-figure problems.
Proactive resident communication.
Addressing clear policies about animals at move-in reduces confusion and after-the-fact disputes.
The companies that get this right typically recover 15-30% of previously lost pet revenue within the first year—often while improving their compliance posture.
Calculating Your Revenue Exposure
Before implementing any changes, you need to understand your current position. Here's a quick diagnostic:
Step 1: Pull your assistance animal percentage
What percentage of your occupied units have documented assistance animals? Industry benchmarks suggest 10-15% is typical for legitimate claims. If your portfolio shows 25%, 30%, or higher, verification gaps likely exist.
Step 2: Calculate your collection rate
Divide actual pet revenue collected by potential pet revenue (based on estimated pet ownership). If you're collecting less than 70% of potential, you have leakage.
Step 3: Audit a sample
Pull 10% of your ESA files randomly. How many have documentation that meets HUD guidelines? How many came from providers lacking a documented therapeutic relationship with the tenant?
If this diagnostic reveals gaps, you're not alone—and the situation is fixable.
Five Steps to Recover Lost Pet Revenue
1. Audit your current state.
You can't fix what you can't measure. Conduct a portfolio-wide review of pet revenue, and compare your number of pets vs assistance animal requests to see if your numbers align with national standards.
2. Standardize your verification process.
Create (or adopt) a consistent workflow for ESA requests that applies across all properties. Document it, train your teams, and enforce it.
3. Implement compliant documentation review.
This is the critical step. Whether through internal expertise or third-party support, ensure every assistance animal request receives appropriate verification that satisfies fair housing requirements.
4. Close the communication gaps.
Update your animal addendum and make sure you’re asking applicants if they have any animals, not just pets. Ensure new residents understand requirements at lease signing. Make the process clear and accessible.
5. Track the metrics.
Pet revenue should be a line item you review monthly. Establish benchmarks, monitor trends, and investigate anomalies.
The 30-Day Opportunity
Most property managers who implement proper pet screening and verification processes see measurable revenue recovery within 30 days. This recovery isn’t due to denying legitimate ESA requests. But by implementing consistent processes, previous gaps are closed. surface the gaps that were invisible before.
For a 500-unit portfolio, 30-day recovery typically ranges from $5,000 to $15,000. Over a full year, that compounds into a meaningful NOI impact.
The question isn't whether you're losing pet revenue. The question is how much—and how quickly you can recover it.
OurPetPolicy helps property management companies verify assistance animal requests with compliance, screen pets efficiently, and recover lost pet revenue. Trusted by Property Management Companies managing over 2 million units nationwide.
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