Written by alaglaspools
November 18, 2018
It is fairly safe to say that in most cases a pool will add value to your home in terms of increasing its worth, as well as increasing its personal value. However, adding a pool to your rental property may not be as sound an investment.
If your backyard space and your budget allow it, building a pool has several benefits:
- The value of your property increases.
- You can attract better tenants.
- It is a reliable long-term investment.
- A pool enhances the appeal of your property.
If you are new to the rental real estate business and have limited capital, installing a pool on your rental property may lead to :
- Expensive installment prices.
- High maintenance costs.
- Liability for accidents.
- Longer ROI.
Installing a pool on your rental property is much more complex than digging a hole and filling it up with water. This project will require a large capital, commitment, and patience.
You will need to consider the site of the pool and whether your property really is suited for one. If your yard is small, the pool will take up most of the space, affecting the property’s value, while if it is indoors, a pool could take away from living space.
One of the biggest variables is where you live. If you live in a mild to warm climate where you and your tenants likely get many months of use from your pool or even rely on summertime swims to stay cool, then installing a pool makes sense.
The cost of installing a pool on your rental property may range anywhere between $35,000 and $80,000 depending on the size, design and again, the location of your home. Talk to your financial advisor before starting to dig. They can help you calculate the return on investment (ROI) and whether it will be profitable in the long run.
FINANCING YOUR POOL INSTALLATION
Now that you know the cost of installing a pool on your rental property, and have figured out how to obtain a return of your investment, you can proceed to the next step: financing the pool installment.
A loan is probably the best financing solution. Talk to your bank to reach an agreement for a long-term option for your project. Additionally, reach out to real estate agents to find out the average rental cost of a house with a pool in your area. You will also need to determine if a good share of the loan can be covered by the tenant’s monthly payments.
You will also have to check with a contractor to find out how long it will take to build a pool. The property may not be rentable while the pool installation takes place, which means that you will have to endure a couple of months with zero income.
Having a beautiful pool installed is only the beginning. Like many purchases in life, a pool’s initial cost is actually the least expensive, especially if you fall into the category of wanting to keep your home for the long-term before selling.
A pool requires consistent maintenance and the costs of its upkeep may rise every year. It may not seem like much at first, but when you break it down in monthly payments and take it out of the tenant’s rent, you might see your passive income decrease considerably.
Heating, cooling, chemical cleaners, vacuums, vinyl liner replacement and eventual painting or resurfacing of a concrete pool are just a few of the upkeep costs to think about. You can get a realistic maintenance quote from a contractor, by doing some thorough calculations in your research, or you could even ask a neighbor who has a pool.
You will most likely have to hire a professional firm for pool maintenance. These professionals will perform weekly checkups, treat the water and ensure that it is not harmful to people who swim in it. They will also clear and repair the filtering system and prepare the pool for the cold season. All of these services can cost as much as $400 per month.
Installing a pool will increase the value of your rental property, but you will have to ensure that your finances can sustain the installation and the long-term maintenance costs for a pool to become a significant asset for your property. When designing your swimming pool to add value, plan to include a swimming pool that integrates the home with outdoor entertaining areas. Designs that are in clear view of the main entertaining areas of the home act as an extension of living areas. It will attract better tenants, and it can be a convenient amenity for you and your family if you ever decide to stop leasing.
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