It’s summer time, and most people relish the idea of lounging at the swimming pool. It is a fun way to entertain and play with the children. Yet, often questions arise – is it wise to invest in a swimming pool? Will adding the pool increase the value of my home? Will the pool make it easier to sell my home? There is not one answer for all homes nationwide, but we will address some of the things to consider before you dive into the world of being a swimming pool owner.
It is my opinion that in most real estate markets an in-ground swimming pool should only be considered as an investment in your personal appreciation, not your real estate appreciation. The owner may determine the true return on investment is the quality of life and enhanced enjoyment of their home.
I have a friend who purchased a home with a swimming pool a few years ago. This year, as they were opening their pool and determined they needed a new pump and other equipment, they made the decision to pay thousands of dollars to fill in the pool and do some landscaping. Why did they make that decision? They said that the annual cost of maintenance and the time required to maintain the pool outweighed their enjoyment. In some real estate markets, a swimming pool may actually have a negative impact on value. If the pool is older, has not been maintained, or is poorly positioned on the lot, it may discourage buyers from the property.
So, why doesn’t adding a $50,000 swimming pool usually increase the value of a typical home by $50,000? There could be many reasons…
- It is not a typical improvement for the neighborhood. If only a few of the homes in the neighborhood have a swimming pool at the time of an appraisal, the appraiser may not be able to locate a sale that closed recently with a pool. A swimming pool may be an over improvement in many neighborhoods.
- Potential buyers may consider the pool a continuing money pit, or they may have safety concerns for children. Therefore, when the property is on the market for sale, there may be a smaller number of potential buyers.
- The lot is not large enough to accommodate the pool and still leave an area for playing in the yard or gardening. Use caution not to build a pool that is too small to be truly functional for swimming and playing.
- The neighborhood has a community pool. Many people prefer that someone else manage the cost and time of maintaining a pool. Others may prefer a community pool for the social aspect.
In neighborhoods where most homes have a swimming pool and a pool becomes an expected amenity, there may be a better return on investment. Executive, luxury home buyers may expect an expensive luxury swimming pool, resulting in a better return. Some markets, like Florida or Arizona buyers, may expect a swimming pool. Beach or resort homes typically benefit from a swimming pool, but benefiting does not mean that once the decision is made to sell that a seller will get all of their investment back.
Above ground pools are not considered in the real estate value, so they have no impact on value. Many realtors will suggest removing an above ground pool before listing the property for sale.
So, reading this blog, you probably think I am very opposed to owning a swimming pool. Actually, we do own a swimming pool and enjoy it and feel it has added personal enjoyment to our home. However, we made the decision to add a pool knowing that we do not plan to sell anytime soon and that we will not get the full investment of the pool when we do sell.
Valuation Management Group is a national, full service appraisal management service company that manages the appraisal process for financial institutions, banks, mortgage bankers, and credit unions. We offer the full array of commercial and residential appraisal products and services. We take the appraisal process from ordinary to extraordinary.
Blog written by Vicky Thompson, CEO, Valuation Management Group