Does it make sense to purchase a hot tub for a vacation rental or vacation home? What are the pros and cons? Do the costs outweigh the benefits? These questions come up regularly in consumers’ minds as they contemplate purchasing a hot tub for their vacation rental.
Below are some key reasons for and against purchasing a hot tub for a vacation home or vacation rental:
Increases desirability of home by prospective renters. For most would be renters they would more than likely rent a home with a hot tub versus without. Especially in certain summer or winter destinations. For example, in a ski area, a cabin or home with a hot tub would be very desirable. Who wouldn’t want a nice therapeutic soak after a long day on the slopes. Similarly in a lakeside or oceanside setting there is a nothing like an early morning or late evening soak as you watch the sun rising or setting.
Increases value of the vacation rental and what renters may pay per night. If there is a reasonable price difference between a home with versus without then a potential renter would be inclined to pay the premium to stay at the home with the hot tub. It is important to analyze nightly rates for comparable homes in the same area and attach a reasonable nightly premium if your home has the added amenity of a hot tub. That could be $20-40 per night. If you are able to fetch an extra $40 per night and your occupancy rate is 90 days out of the year then $40 x 90 nights is $3600 more per year. Given the fact that your middle of the road hot tub is between $6000-$8000 then it’s reasonable to think that you could recover your investment in 2-3 years.
Upfront cost to purchase. The immediate layout of cash to purchase a hot tub is one upfront barrier as a decent hot tub is going to cost $6000-$8000. This can be somewhat mitigated by financing the hot tub.
Added liability. Having a hot tub comes with some added exposure from a liability standpoint. If someone gets injured or worse then a hot tub can be a source of aggravation rather than added value. It would be wise to talk to your homeowner’s insurance provider about any extended coverage needed for having a hot tub and any added costs.
Additional costs and maintenance. Naturally, a hot tub will come with some amount of regular maintenance to ensure it is always in good working order. This could be things like cleanings, chemical maintenance, energy usage, and the occasional repair. Before purchasing it maybe wise to talk to your local hot tub dealer or service company to find out what they would charge to put the hot tub on a regular maintenance schedule and the costs associated with upkeep. Most companies charge a few hundred dollars per month for a hot tub maintenance program. These costs should be reconciled against any incremental income that the hot tub might generate so that a proper cost benefit analysis can be done to ensure it makes sense to have a hot tub.
In most cases having a hot tub at a vacation rental does make financial sense and even if it’s a breakeven scenario as it will increase rental demand which will ensure higher occupancy rates.
One important recommendation is to consider purchasing a more basic hot tub rather than one with a bunch of bells and whistle. The more basic the hot tub then the less things it has to go wrong that will require maintenance or repair. There is also a point of diminishing return for would be renters because they are looking to see if the home has a hot tub or not. They aren’t scrutinizing how fancy it is. A hot tub with a single pump and twenty to thirty jets is adequate. Consider an eight foot size as it will accommodate a larger group of people. Also avoid features like stereos, waterfalls, LED lights, or anything else that might easily be damaged or fail from heavy use from renters. A more basic hot tub will also cost less which is an added bonus.