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I think the piss stains and smell are the main problem.
But there have also been cases where a large dog attacks another tenant and the landlord is sued for allowing the large dog.
Here's one case I remember:
http://en.wikipedia.org/wiki/Diane_Whipple
Looks like just the dog owner was sued though.
Animals do have a lot of odor. If probably would have to replace carpet when owners leave.
I just have several friends who do own pets, and their houses always have a smell of a dog in them.
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Most complexes simply deny pets. Those that allow them, often charge pet premiums which I assume is just a money grab because they know pet owners have limited choices. Then there are those that ask for larger deposits ($250-$500 per pet). Or those asking for cleaning deposits when they move out($150-300).
So far, I've let people own pets and not really worried about it. I'm renting to premium people. These units are very nice and the quality of tenant has been very strong so far.
I figure if they leave and the animal has done damage, they won't make me go through a small claims case, and if it's over their deposit amount, the $500 extra isn't going to do anything anyway because their rents are already in the $2000 range. I could see asking for $500 extra if they were renting for say $1000, but in the $2000 range, I have a decent amount held anyway.
Is there anything I am missing? Dogs could scratch up the floors or stain it with pee/crap that is left there for hours while someone is at work. Possibly redoing part of the floor. Repainting, some touch up work.
Cats spraying, that concerns me. I've never dealt with it, but I suspect it's not that easy to clean up.
I see pet owners are generally being abused by the system, so they're happy to not be screwed by someone and will actually pay slightly higher rents because of their limited choices.
Are there other reasons not to accept pets? Any major horror stories?