06 Mar Should I Buy a Property With a Pool?
There it is: a low-priced fixer-upper with a decrepit in-ground swimming pool in the backyard. You snatch up this gem at a discount. So what do you do with the pool? Bring it back to life? Fill it in with dirt?
It depends. If you’re planning to lease the house after you fix it up, in most cases it is better to eliminate the pool. There is increased liability associated with having a pool. There is the potential for someone to drown especially if the tenant doesn’t have the same safety standards as you expect; there is more to maintain; the equipment can be costly, especially if the tenant neglects it; and a water leak could flow back toward the house. I knew a situation where a tenant did nothing with the pool, so it became a breeding ground for mosquitoes. The neighbors said it was torture living there until the tenant moved away and someone took better care of the pool.
Some insurance companies won’t insure a rental property with a pool. Even if your insurer does, there are higher maintenance costs and liability issues associated with a pool. Some tenants won’t want a pool anyway.
When shopping for a rental house, I usually won’t make an offer on one with a pool. If I did buy such a property, I would eliminate the pool prior to signing a long-term rental agreement. None of my rental houses have a pool.
An above-ground pool carries its own problems. If it falls over due to neglect, water could pour toward your property or a neighbor’s house. Some above-ground pools are designed to be taken down at the end of each season and reassembled the next year. That can be a lot of work. The liners seem to rip a lot, or they slip down. Not as many people enjoy above-ground pools. I’ve dealt with curved decks that lead up to an above-ground pool, and the deck has to be rebuilt when the pool is eliminated. I’ve also seen pools with tadpoles and fish – fish! – swimming in the smelly green water.
If you’re fixing and flipping the house, the pool will appeal to some buyers yet other buyers will not want it. When you have a swimming pool, the pool of buyers is automatically smaller! There are some buyers who must have a pool and will pay any price for it. If I were flipping a house in a desirable neighborhood with an in-ground pool, I would spruce up the pool to use as a selling point.
As for a short-term rental, sometimes a pool is a strong selling point. When shopping for a vacation rental, my wife and I prefer to focus on homes with a neighborhood pool nearby. That way we wouldn’t have to deal with the responsibilities of owning a pool. We’d rather leave it up to the homeowner’s association to maintain their pool. However, I know some Airbnb and VRBO landlords who offer a pool, and it’s a big moneymaker for them.
There are a few investors who rent out their pool by the hour or for a day. There are people looking to hold a pool party at a well-maintained pool with amenities. Check out Swimply, Poolshare, and TimeOut. This is an interesting value-add situation. However, for practical purposes this pool rental situation may only work at your own residence. I don’t think your long-term tenant would want strangers renting out the pool (unless, of course, your tenant is the one doing the subleasing, so to speak!).
Let me know your experience with an investment property’s pool! Wishing you great success, pool or no pool!
Tai DeSa is a graduate of The Wharton School of the University of Pennsylvania. He became a full-time real estate investor in 2004 after serving in the U.S. Navy. Tai made colossal mistakes in investing (and learned some things along the way). Tai has coached hundreds of entrepreneurs, real estate investors, and real estate agents on how to increase their income and net worth. He has helped hundreds of homeowners avoid foreclosure through successful short sales. Check out Tai’s books on Amazon.com. Tai may be available for coaching and speaking engagements on a variety of real estate topics. Send an email to tai@investandtransform.com.
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