Liability & Backyard Improvements

[Wendy Black]

Our latest investment is a 3/2 home which backs to a "lake" (aka a man-made channel). Behind our wire back fence is a hiking path and then the water. We have a small yard. Rental comps are $1050-1100, but we're hoping to push our rental price up to $1200-1250 by improving the yard and making it a welcome gathering place for family and friends. The $1200-range is the typical rent for waterfront homes with small pools in this HOA.

We thought of adding a barbeque, a table and chairs, and a fire pit.  However, a realtor friend said the liability could be too much with a fire pit.  Even though it's in a suburb of Phoenix, it still gets cold during the winter and chilly at night during the fall and sometimes spring, and the fact that you look straight through the house to the lake the minute you walk through the front door is the "money shot."  

I don't think this would be an appropriate home for parents with young children because of the proximity to the water.  Even so, do you think we'd be open to unnecessary liability with the addition of either a built-in or portable fire pit?  Alternatively, what about a tall propane patio heater (we've never had one), or would our liability be greater or the same with that?  We're not in an earthquake zone, but could that still fall on someone?  

The property has a small covered patio, some grass in the middle, and a small raised concrete pad where the former tenant left a chair, as well as some drought-resistant landscaping.  Gravel is in the yard as it wraps around either side of the house, but the space isn't usable.  On one side is the a/c; on the other are the garbage cans.

Thanks...