Investors, should you purchase a home with a swimming pool for an Arizona rental?
Many investors are reluctant to own homes with pools due to the increased liability and upkeep that a pool may generate. Can you mitigate those risks adequately so that the investment makes sense?
I see two schools of thought on the issues, the easy path seems to be just don't buy any with pools and you have mitigated the exposure completely. The other has been to evaluate the two greatest areas of exposure and determine if the risks are real for you.
Maintenance: We seem to see two schools of thought on this one as well: One is to rent the property out and let the tenant take care of everything. This one has been the most problematic in my humble opinion, if the tenant has any setbacks it is just to easy to let the pool go and how long will it take before you as the landlord really know? The second approach is to have a professional pool service maintain the pool for the landlord on a weekly basis and include the fee in the rent. Professional pool service in the Valley seems to run about $80 a month for weekly service including the cost of the chemicals. The pool maintenance is now covered, your investment is protected and your exposure is limited to breakdown and replacement of equipment etc. Personally I think the later makes sense, you pre-screen the tenant with the higher rent.
Insurance: A number of investors have reviewed this issue with their own legal council and insurance company and found the exposure to be manageable with good insurance limits. Those that have shared have indicated that the insurance levels they were carrying with umbrellas etc were often already adequate to cover the exposure.
Bottom line it looks to me like you can mitigate the risk factors enough that it then comes down to the investment side. Does it make sense to pay an extra $12-$15,000 for a home with a pool? Can I get the extra rent to obtain a return, might I get a better tenant? Might I have lower vacancy or just higher costs?
Your own experience may be different and I would encourage you to speak with your attorney and insurance agent prior to making the investment.
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