BiggerPockets

I wil be buying a home with a indoor inground pool. I am wanting to rent it out. I plan on leaving the pool dry and leave it up to the tenant if they want to fill and maintain it. Is there any legal/insurance issues that I should worry about?

Thank You

I own rentals with pools in hot and sunny Arizona, and they are big headaches. The issues with indoor pools are somewhat different, but pools in general are expensive to maintain and insure. I suggest you check with your insurance company before you complete this purchase to determine if they will insure you for the risk. You will need a high dollar liability policy for this risk. At the very least, the pool will have to conform to local and state pool barrier laws for you to be insurable.

Indoor or outdoor, I would never leave a pool unfilled. Empty pools are dangerous and the shell can shift or crack. Tenants are not capable of maintaining a pool, no matter what they tell you. If you go through with this purchase and decide to keep the pool, you should fill the pool and provide professional pool cleaning and chemical service. This will be difficult with an indoor pool because the tenant is likely to be uncomfortable letting strangers in the house to clean the pool.

In my experience in Arizona, where pools are a desirable amenity, you are lucky to recover half the pool operating cost in rent. I would guess you will recover less in the Midwest.

The better option may be to fill in the pool. I'm not sure how this would work with an indoor pool. You may want to price this option before you proceed.

I'll check with the insurance company. I'll make sure the rent is high enough for me to cover the maintenance of the pool. I'm gettting the home dirt cheap.

There are several issues at hand with regards to an indoor pool. First, liability, which has been discussed. An empty pool is a bigger liability than a filled one! If someone falls in an empty pool, your butt is on the hook. It doesn't matter if it was covered, fenced, signed, and the person was on crack...at a minimum you will spend a fortune in legal fees. If the pool is filled, you still face tremendous liability with potential drownings. Talk to your insurer and make sure you get a good GL insurance policy which covers it. You made need an excess policy too. If you fill it, I would certainly provide a professional cleaning service and make sure your rent is enough to cover it. The other big issue is moisture. Indoor pools require a way to handle the moisture and evaporation. In the grand scheme, it is ideal if there is a powered exhaust fan that turns on when moisture levels reach a certain per cent. Surely that is not already in the home, unless it is an extremely high end home, which is doubtful if you are getting it for that great of a price. So you need to consider the possibility of future mold, or even a current mold problem depending on the age of the home. Mold can develop extremely quickly given the right elements...moisture and food being the two most important...which an indoor poor is a perfect combination. A thought would be to demolish and fill in the pool? Anyway you look at it...you have costs a risk.

Unfortunately, the courts have a history of holding landlords liable for pool related deaths and injuries.

Due to this, many insurance companies will not cover a rental unit with a pool or charge enormous premiums to do so.

Given these facts, the majority of landlords avoid properties with pools like the plague.

I will never purchase a property with a pool, myself, as there is not enough extra ROI from the rents to justify the added risk.

There are plenty of properties available that command decent rents that purchasing one with a pool is not necessary.

I suggest you walk away from this deal as a rental investment. If you want this property for your personal use, then fine.

Own the property in an LLC by itself to help isolate the liability issues. You should also check with your Attorney to find out what he/she thinks you should do.

-Michael