Property investors warned about swimming pools when buying a home
During the summer months, properties with swimming pools prove very attractive for home buyers. However, investors need to take a more pragmatic approach to buying a home with a swimming pool.
Blogger: Rory O'Rourke, O’Rourke Realty Investments
This is because one of the common mistakes that property investors can make when buying a home for rental purposes is to purchase one with a swimming pool.
A house with a swimming pool generally does not command significantly more rent than a similar property without a swimming pool yet the investor can be saddled with high maintenance costs associated with swimming pools.
Many investors have fallen into the trap of buying a house with a swimming pool because over the last decade there has been a major focus on outdoor living in the WA property market with property owners spending larger amounts of money on enhancing the outdoor living features of their homes.
This focus on lifestyle is encouraging more property buyers to purchase homes with swimming pools.
Unfortunately, people who are buying an investment property take this same emotional approach and believe that a home with a swimming pool is a good investment.
Historically, more property buyers tend to purchase homes with swimming pools during the hotter months because they look more appealing during this period of the year.
The financial reality is that property buyers are unlikely to recoup the additional money they paid for the swimming pool in the short term.
This is because if they decide to sell the property after a short period of time, there will be as many buyers who do not want a swimming pool as those who want it.
For investors, the purchase of a home with a swimming pool can prove a financial headache. While swimming pools are attractive to some renters who have children, there are an equal amount of tenants who do not want a swimming pool.
In addition, the landlord has the problem of ensuring the swimming pool complies with all current Federal, State and Local Government regulations. They also have to pay the cost of regular local government inspections. Landlords also have to consider any public liability claims which may arise if someone is hurt using the swimming pool.
There is also the cost of maintaining the swimming pool. Swimming pool equipment needs to be regularly replaced and this can prove very expensive. For example, the cost of a swimming pool pump to purchase and install can be in excess of $1,000.00.
In addition, there are also the growing financial costs of paying for the water, maintenance, cleaning and chemicals associated with swimming pools. If you are buying an apartment in a complex which has a pool, then these costs can be shared. However, stand-alone property owners must carry the full costs.
Recent rises in government taxes and charges have put a squeeze on the cash flow of many landlords, so buying a home with a swimming pool needs to be treated with caution.
If you have just purchased a home with a swimming pool as an investor, then you should ensure that the contract states that the tenant is responsible for the cost of all water consumption associated with the property. In addition, you should also ensure that the weekly rent covers the cost of employing a swimming pool company who can regularly service the swimming pool.
However, if you are considering buying an investment property for the first time, you should consider buying a home in a good location that has features that appeal to all tenants. These features should include ducted air conditioning, a garage and good security.
