Florida Short-Term Rental Pool Decision

The Florida Panhandle, located in the northwest corner of Florida is one of the most popular vacation spots in the United States. It is a beautiful area with stunning beaches and great weather. Finding the right property for a Short Term Rental (STR), can be difficult. We've done the math and determined whether the pool is necessary. This is a critical decision in warmer climates.THE FLORIDA WEATHERThe average daily high temperature is 82°F in summer and 66°F in winter in the Panhandle region. Many vacationers who are looking for a STR in the Panhandle can find it very hot, making pools a popular choice.Interestingly, homes with pools tend to rent for $20,000-30,000 less per year than homes without a pool.THE INVESTMENTAn investor who wants to purchase a home with pool for a better cash flow should ask the following question: Should you buy a house with a swimming pool, or a home without one? Then, install the pool later. Which one is more affordable?We first need to determine the difference in price between homes that have pools and those without. In general, Panhandle homes without a pool are $450,000 more costly! If we were to simply tell a simple story about buying a house without a swimming pool, the article could be completed in a matter of minutes. After all expenses associated with building a pool have been taken into account, it would be possible to save $390,000. These savings are illusionary, unfortunately.Square footage differences are the real reason behind the wide price gap between homes with and without a pool. Homes with pools typically have an extra 630 square feet. This can add up to $350,000. This information can help you save $40,000, but it is not the only way to go.We divided our data into categories so that each category represented 200 square feet. We then calculated the difference between homes that have a pool and those without. We also calculated the average cost of each home, the expected occupancy percentage, estimated rent, bedrooms and bathrooms. This analysis revealed a surprising result: homes with pools have more bedrooms and bathrooms, even though they are in the same square footage range.Homes with a pool have five bedrooms and five baths, whereas homes without a swimming pool have four bedrooms and four bathrooms. The graphs below show that an increase in bedrooms or bathrooms will generally result in a rise in price. We want to see how homes with pools in the 2800-3000 square foot range compare to homes without pools with comparable bedrooms and bathrooms.We continued our example and calculated that homes between 2800 and 3000 square feet have 5 (+/- 1 bedrooms, 5 (+/- 1 bathrooms, an average price of $1,133,650. This is $160,000 less than the price of a home with a swimming pool between 2800 and 3000 square feet. The next step is to add the cost of adding the pool to the house to the price. Add $35,000 to the property's price (average pool price) and.166 to the average annual rent. Because it takes approximately two months to install a pool, the average rent for a home is.166. The rent loss would increase the opportunity cost to build a pool.The above equation can be used to calculate that a pool costs an average of $52,944 for a home. For a 2800-30000 square foot home, a pool would cost about $52,944.However, adding a pool does not always result in a savings of so much money. We find that a pool costs only $4273 less for homes with 2200-2400 square feet. This finding is easy to overlook and it's not clear which option is cheaper for each square foot.None of the tested categories showed that building a swimming pool would increase the price of a house than buying a home already equipped with one. However, a pool can end up costing as much, and the extra effort required to install it, so buying a house with a pool installed might be a better option. Please note that the study was extremely localized. There will be differences in how a house is built or if it has a pool that is already there. This can vary from one region to the next.

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