Pools in Rental Properties in Weston Florida
Gaston Reboredo • December 17, 2019
Enjoyment, Compliance, Higher Rent and Liability
No question that a property with a nice pool is more desirable for Families, Empty Nesters and Young Adults, generating a higher rent than a similar property with no pool, especially in South Florida. There are regulations to follow, for example in the City of Weston a pool has to be fenced or screened by City Code but Landlords should not stop there and only comply with regulations of the municipalities. In the City of Weston the regulation calls for a pool to be screened in or the yard fence to avoid a child can walk from outside the property into the pool area. But what about children living in the property or visiting the occupants of the property. We manage several homes with pools in the City of Weston and beyond what is required by the municipality we install child pool fences in all of them. It is an additional cost to Landlord but actually an improvement to the property and a piece of mind that a catastrophe can be avoided. In addition to this we require tenants that rent pool homes to obtain an additional renter's liability insurance policy with sufficient coverage and to execute a pool addendum, limiting Landlord's liability due to any tenant or third party negligence. Also property owners need to check their insurance policies, especially their liability coverage. In summary Landlords should install any necessary protection devices to make pools safer, should have good liability risk coverage, should enter into additional contractual agreements with Tenants such as very specific pool addenda to Leases and must require Tenants leasing pool homes to obtain additional liability coverage naming Landlord and his/her property management company as additional insureds.
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What is it? A cost segregation study looks at the different parts of a rental property to see which ones can be depreciated faster. This can allow investors to take some deductions sooner instead of spreading them out over the standard 27.5 years. Who uses it? It’s mainly used by real estate investors and property owners who want to claim larger depreciation deductions sooner on their rental properties. A qualified tax professional or cost segregation specialist typically performs the study. Where does it apply? Cost segregation can be used on residential rental properties, including single-family rentals, although whether it makes financial sense depends on the property and the investor's tax situation. The IRS specifically provides guidance for cost segregation studies involving residential rental property. When should investors consider it? It is often considered when purchasing, constructing, or making significant improvements to a rental property. Investors can also look at existing properties, but the potential benefit depends on the property's cost, improvements, and tax circumstances. Why does it matter? The goal is to potentially move some depreciation deductions into earlier years, which can reduce taxable income sooner and potentially improve near-term cash flow. It doesn't create new value in the property, it changes when certain costs may be deducted for tax purposes. Investor Takeaway: A cost segregation study can be worth exploring for investors with higher-value rental properties or significant improvements, but the potential tax benefit varies from property to property. It is recommended to always work with a qualified tax professional to determine whether a study makes sense for your situation.
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