Spa's in IP

Hi,

I have an investment property in which the SPA gas heater has died. It is an outdoor 6 seater spa.

The existing setup i've been told is actually illegal because it uses an instantaneus flow system. The gas fitter said he would only fix if it was being rented out, otherwise he was liable.

A new gas heating system for the spa will cost $2500. In addition I will need to put a fence around the spa to make it completely legal.

The opinion I would like to know is,
1. Is it worth fixing up the spa heater and fence potentially costing $3000.. (I am afraid future tenants might not maintain it properly)?
2. how many $ a week extra rent can i expect with spa vs no spa IP.
3. Does a spa attract more tenants or less tenants.

My current tenant is very flexible and will prob not be too bothered if it works or doesn't.

My long term plan is to demolish and subdivide, rebuild in 5-10 years.

Any advice is appreciated as I've only owned this place for two years and I don't know too many property investors. 1st time poster also :)
 
Hi Thieryy,

I wouldn't bother with spa, try sell it if you can and if its broken don't worry about fixing, just say it isn't in lease
 
Welcome Thierry - I'd say get rid of it. Without a fence, there are some potential issues with your insurance etc. I don't know about Adelaide, but in Melb I don't think it would get you a massive rent premium.

Cheers,

The Y-man
 
i would leave it out, we have a spa at my current place i am renting, this thing is a never ending string of costs.

to fix it up 100% they are looking at close to 2 months worth of rent!!
 
thanks

thanks, that was my initial opinion also.. i.e to not fix it and remove it from the lease.
Would I leave it with no water in the spa? or find a way to permanently close it?
 
Perhaps post it on Freecycle offering for the person who wants it to take it from you? Someone might be happy with a 2nd hand spa to fix up, and you won't have to put effort into removing it yourself?
 
yes I'll have to see if I can remove it or cover it up. It is right near the glass doors to the dining room, so i'll have to make sure it looks ok whether I remove it or cover it.

btw thanks i'll have a look at Freecycle
 
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compensation

hi,

what do you think would be appropriate compensation for the current tenants since they can't use the sap now? They are currently paying 310 per week.

thanks.
 
i love spas... ill rent it... does it come with champagne cup holders?


but seriously.... spa in a rental property = no good.
 
turns out my current tenant is not that flexible and is asking for a 15pw rent decrease!

skater. that is a great point. I think that is a win-win solution, and I think that might need to be used.

Curiously, in terms of laws.. if we don't agree to a compensation.. does that mean its a breach of the agreement on my part, and they can leave? (which i'm not too fussed about)
Also with a rental increase I understand I need to give 2 months notice, what if they don't agree to it? Where do i stand as a landlord, and where do they stand as a tenant?

and yes.. I can't wait to have the spa removed!

Thanks again for your help..its priceless!
 
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turns out my current tenant is not that flexible and is asking for a 15pw rent decrease!

Negotiate a decrease of less than that but then bump the rent up by $25 in 6 months time. This way you'll recoup your money within a year.

After this you can assess what the market rent is and put it up again if you have to.

Cheaper than paying 3K, no future hassles and no liability concerns.
 
turns out my current tenant is not that flexible and is asking for a 15pw rent decrease!

skater. that is a great point. I think that is a win-win solution, and I think that might need to be used.

Curiously, in terms of laws.. if we don't agree to a compensation.. does that mean its a breach of the agreement on my part, and they can leave? (which i'm not too fussed about)
Also with a rental increase I understand I need to give 2 months notice, what if they don't agree to it? Where do i stand as a landlord, and where do they stand as a tenant?

How long have they been there? Are they on a fixed term lease, and if so, when does it expire? Or are they month to month?

Whether you can actually put the rent up will depend if it is a fixed term lease and how long ago the last one was. You do need to give notice and there are only four things they can do about it.

1) Pay it.
2) Move.
3) Negotiate a reduction (only if you are willing)
4) Take you to tribunal (or the equivalant in SA), but they would have to prove that the increase was excessive and your PM should have plenty of examples to prove that the rent is market value.

As far as them wanting a $15pw decrease for the removal of the spa, I'd be telling them they are dreaming. If they are on a fixed term, at a time where you cannot increase the rent, then maybe negotiate a $5 decrease, but there is no way on earth I would agree to $15. That is unreasonable and I am sure that when they rented your place, it was not $15 above the value of a place without a spa. In saying that, though, as soon as possible I would be increasing the rent by a substantial amount above the reduction (just because I don't like tenants that play games).
 
To cut a long story short.. the tenants have moved out and new tenants are moving in now.

I have now filled the spa in the playground chip, looks like an interesting feature! The new tenants said they were happy with a cold water spa, however pool safety laws I have since found out require me to put a fence up.. so the options boiled down to:
1. Fix + install fence
2. Fill
3. Remove.
4. Cover.

Filling it was the cheapest option.. cost me 100 bux all up and a bit of my time.

New tenants were not willing to pay extra rent for a working spa which made the decision to fix/not fix pretty simple. Also.. the pump was probably nearing the end of its life as well.

Thanks again for your help and insight.
 
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