In my searches, I am coming across many properties with pools. In areas such as Arizona, Florida, Texas, and Nevada, I am finding pools are very common and almost preferred. I have found some great properties, but I am hesitant due to the pool. I am debating with the pros and cons and I am putting it out there to see if there are other investors with experience. This is what I have determined so far, please let me know what I am not including or if this is totally wrong.
Pros: Increased property value. More likely to rent faster than properties without.
Cons: Higher liability, Possible tragedy. Higher insurance. Maintenance.
Also, if I find the perfect property and do NOT want the pool, has anyone bought a property only to fill the pool with dirt?
Most investors that I know seem to shy away from pool homes due to the maintenance needed and liability. Usually there are enough deals to buy without taking on a pool home. I have heard of some that have filled them in if the deal was good enough.
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^ Is all that yelling really nessisary?
My concern would certainly be liability. Maybe a more experienced investor can put a number on the insurance increase a pool would add?
I would consider a pool for a flip if the property would meet FHA financing requirements. I would not for a rental due to the running costs occupied and unoccupied.
I think in AZ the pool is also required by law to have a fence around it. If you do get a property with a pool in AZ make sure it has a fence or it can cost you big, especially if a kid drowns. Worth looking into if you are getting a property with a pool.
@Andrew Warner thanks for the heads up!
I have owned 2 rentals with pools. There is ongoing maintenance required but for me it is well worth it. I would think twice about spending $3-5K for filling in a pool.
Pools can be asset to a home in marketing the house especially in warmer climate areas. They can also be huge liabilities in my work flipping homes in southern California. They are great draws to buyers, but many buyers now want the pools updated to saline, and many of the pools have to be re-finished, and new pump systems do to age. If you have a great pool guy it can be rewarding, but you also have to pay for the upkeep of pool if the home is on the market for any amount of time.
We have also had pools that had leaks, and for those we had to break out the bottoms and fill with dirt. The cost wast to great to replace and bring them up to modern code. Just some warnings in flipping with pools involved.
In addition in my experiences with pools if the properties were foreclosures, it seems that pools are one of the targets for a angry ex-owner. I guess the best advice is just do the due-dilligence.
I dont think a pool adds value. When I buy a rental, I consider it a negative ie it REDUCES my offer when I buy.
MANY headaches and expenses with a pool. Expect to pay pool service (and pool service guys seem to be overly flakey). Expect the tenant NOT to do their part by running the pump and topping off the water.
Expect the tenant to blame the pool guy and the pool guy to blame the tenant. Has the pool guy really NOT been there for 3 weeks or is the tenant just saying that because he had no idea having a pool increased utility bills?
If the pool goes green expect a call from code enforcement (mosquito hazard). And then expect even more expense to get the pool back in shape.
Expect added expenses to repair replace pool parts... pump etc.
Do follow the fence rules to be sure. And double up on liability insurance... just in case.
The one good thing is that it may give you an early warning if your tenant skips. If they turn off the utilities then your pool guy can let you know. (But if they are true deadbeats they may just let the utility bills ride.)
At the risk of being a redundant poster here, pools only make sense as a fix & flip deal. However I would not consider a pool property for an SFR rental.
Here in litigious CA, I've heard and witnessed enough stories, both on the sad side as well as the abusive side, to cause me to avoid keeping pool property in my rental portfolio.
I've had a number of probate properties that I've acquired and retailed and I'm not so fearful of that, however people can and do still fall (and skateboarders like my friend Mike Cantu have been known to use as a private skateboard park).
As for value, I would put the value of the property as ARV minus permit + demo cost unless in a community like Palm Springs where a pool is almost considered a necessity.
My mother in law built a deck over her pool cause it was cheaper and looked better than filling it with dirt.
@Jon Huber I'd be reluctant to keep a SF Rental with a pool. And around here, Boston, you can't just fill it in, because it becomes a soft spot with the limited drainage (even if it leaks). So figure on Demo and removal not just fill in.
If you're coming up with several of these you could become the "Pool Boy" (expert in this niche;-) and work it!
Good insurance guy can look up the address in about 15 seconds to see any past or current problems. and future insurability, coverage specifics and cost.
Building departments can help with what the requirements are to install or demo.
Good (as in, check with at least three) Pool Contractor, Installation company can help with maintenance, safety and sales costs!
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