A well-maintained pool can make a rental more desirable to certain tenants and may support higher rental returns in the right location. However, installing a pool is a significant investment that comes with ongoing responsibilities, costs and insurance considerations.
Before taking the plunge, this is what every landlord should know.
A pool is more than just an upgrade
Adding a pool or spa can enhance a property’s appeal, but it also introduces additional risks and responsibilities. Beyond installation costs, landlords need to consider planning approvals, ongoing maintenance, safety compliance, tenant expectations and the impact on insurance. Importantly, a pool is considered a material change to the property. Whenever significant improvements or alterations are made, landlords should review their insurance arrangements to ensure cover remains appropriate.
Tell your insurer about the change
The addition of a swimming pool or spa may change the risk profile of the property. Insurers rely on accurate information to assess whether they are prepared to offer cover, the terms on which cover is provided and the premium charged. Failing to disclose a significant change could affect future claims or result in reduced cover.
Review your building sum insured
A new pool represents a substantial capital improvement to the property, which means your existing building sum insured may no longer be adequate. If the property suffers a major insured event, such as a storm, fire or other covered loss, you will want to ensure the sum insured reflects the cost of rebuilding not only the home but also the pool, spa and any associated structures such as fencing, paving or decking. Underinsurance can leave landlords significantly out of pocket when it is time to rebuild.
What if a tenant installs a portable pool?
As temperatures rise, some tenants may look to install an inflatable or portable pool themselves. While these pools may seem temporary, they can still trigger safety and compliance obligations. Landlords and property managers should be aware of local requirements and discuss any proposed installation with tenants before approval is granted.
Consider how maintenance will be managed
Before leasing a property with a pool, consider who will be responsible for ongoing maintenance. This may include cleaning, water testing, chemical balancing, servicing pumps and maintaining filters. Many landlords choose to engage professional pool maintenance providers rather than relying on tenants to undertake more technical or potentially hazardous tasks. If any maintenance responsibilities are assigned to tenants, these should be clearly documented within the tenancy agreement.
Do not overlook liability risks
As the property owner, you are responsible for providing a reasonably safe environment and complying with relevant legal obligations. Landlord insurance may include legal liability cover, which can help protect you if you are found legally liable for injury or property damage suffered by another person. However, liability insurance is not a substitute for meeting your legal responsibilities. Failure to comply with applicable safety laws or regulations could impact cover.
It is also worth remembering that your landlord insurance protects your interests, not your tenant’s. Tenants should consider arranging their own contents and liability insurance to protect themselves against claims arising from their actions or occupancy of the property.
To sum it up
A pool can be a valuable addition to a rental property, helping attract tenants who prioritise lifestyle and outdoor living. But it also brings additional responsibilities, from safety compliance and maintenance through to insurance and liability considerations.
Before investing in a pool or spa, take the time to understand your obligations, review your insurance and ensure your cover keeps pace with changes to your property.
Want to learn more about protecting your investment property? Contact the EBM RentCover team on 1800 661 662.