What Landlords Need to Know About Outdoor Additions

Tenants want outdoor space, and they’re willing to pay for it. Considering 34% (44 million) of households in America are renters, you, as a landlord, want to do your best to appeal to this large market. The rental property with outdoor additions, like a deck and fire pit, appeals to tenants looking for space in their home to enjoy the outdoors.

Outdoor additions can boost your rental income—and keep tenants happy.

The ROI of outdoor additions

The numbers on outdoor additions are pretty compelling when you know what you’re doing. Take decks, for instance. A well-built wood deck might cost you anywhere from $8,000 to $16,000, but you can often justify bumping the rent by $50 to $150 per month. That deck soon pays for itself faster than you’d think!

Permits and how to survive them

Permits are a pain; they cost money, take time, and dealing with city bureaucrats isn’t exactly fun, but skipping them puts your entire investment at risk.

Nearly everything you want to build is going to need some kind of permit. New deck? Permit. Building a shed over 120 square feet in California? Permit. Adding electricity to your outdoor space? Definitely a permit. The rules vary by city, but there are some pretty universal triggers you need to know about:

• Most places have size thresholds, and anything bigger needs a full building permit.
• Height matters as building something over 12-15 feet tall (depending on your area) requires a permit
• Anything that touches the structural integrity of your building, like an attached deck, is going to need approval.

The permit may seem like bureaucratic red tape, but it’s actually your legal shield. If someone gets hurt on your property and you don’t have permits, you’re looking at a negligence claim that could wipe you out financially. That annoying permit fee is much more welcome when compared to the potential of a lawsuit.

Material choices that will last

Rental properties need materials that can take a beating and withstand time. Your tenants may not be responsible for the upkeep of your deck (unless stated in the lease), so plan accordingly.

Pressure-treated wood might be cheap upfront, but it’s a maintenance nightmare. You could be staining and sealing it every few years. Composite decking costs more initially, but they’re basically bulletproof. No staining, no sealing, just occasional cleaning.

For fencing, vinyl or PVC is your friend. It costs more than wood, but it’ll outlast three wooden fences and never needs painting or staining. Aluminum fencing is also a great option if you need security but not privacy.

Covering your assets (literally)

Your regular homeowner’s insurance won’t cut it for rental properties, and it definitely won’t automatically cover new outdoor structures. You need landlord insurance, and you need to tell your agent about every addition you make.

That fire pit that makes your property so attractive is also a liability magnet. Same with pools, hot tubs, and even decks. Your insurance company needs to know about these things before something happens, not after.

The lease agreement tweaks

A generic lease is legally insufficient when you start making significant outdoor changes. The lease agreement is the landlord’s most powerful tool for managing rental property upkeep, defining responsibilities, and protecting the property. Consider adding the following lease addendums when you start sprucing up the backyard:

• Exterior Maintenance Clause: This clause can explicitly assign responsibility for tasks like lawn care and snow removal. It can be structured as full-service (landlord handles all), self-service (tenant handles all), or a la carte (responsibilities are split). Be sure to detail the consequences for tenant non-compliance, such as the landlord hiring a service and billing the cost back to the tenant.
• Use of Outdoor Space Addendum: This is critical for managing the cool new stuff you have added to the property, and clear rules should be established for things like furniture and decor, grills and fire pits, and even noise and cleanliness.
• Landlord’s Right to Access: If you want to enter outdoor areas for upgrades or maintenance, you need to provide reasonable notice (typically 24-48 hours).
• Renter’s Insurance Requirement: Always include a mandatory clause requiring tenants to carry their own renter’s insurance with a minimum amount of liability coverage. This will be handy just in case any tenant negligence pops up.

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