A cool pool on a hot summer day may seem like a dream come true for you, the homeowner. But do you know how it affects your home value? Many people assume pools increase a home’s value, but that’s not always the case.
The Small Return on Your Investment
Let’s face it, pools aren’t cheap. According to House Logic, adding a pool helps homes appreciate around 7 percent. A $300,000 home may be worth $321,000 after installing a pool. Chances are, that pool installation will cost more than $21,000, though. House Logic states that the average pool installation costs $30,000.
In order for your home to appreciate as much as 7 percent, it must meet the following:
- You live in a high-end neighborhood where a majority of homes have a pool
- You live in a state where you can swim year round
- You have enough land to accommodate the pool and still have room for other uses in the yard
In other words, a pool must be the norm for the area. If you don’t have a pool, it would make your home less desirable because most other homes in the area have one. It helps if you live in a warm climate and have plenty of room for other activities in the yard (the pool doesn’t take up the entire land).
Will You Recoup Your Investment?
The largest concern is whether you will recoup your investment. Earning 7 percent appreciation on your home makes it hard to recoup the cost of a pool. Pool installation and water fill-up costs between $20,000 and $30,000 on average.
You still have other costs to consider. What safety requirements does your city require? Do you need fencing or lighting? You may want to enhance the pool with landscaping – another hefty investment.
Now there’s upkeep. Will you heat the pool? You’ll need electricity to run it. You also need to maintain and possibly repair it from time to time. You need chemicals to keep the water safe. Some homeowners do this themselves to cut down on costs. But you still have to buy the chemicals.
Next, consider the insurance costs. Your insurance may increase slightly, especially if you add a rider to increase your coverage. Basic homeowner’s insurance may cover your pool, but not enough. Most homeowners add additional coverage to protect them against liabilities.
Will Your Home Sell Faster?
Many people assume a pool is a selling point, but not for everyone. Again, what’s the climate in your area? If you don’t live where it is warm year-round, you may come across numerous buyers that view the pool as an obstacle.
If pools are the norm in your area, though, it may bring more sellers to you. The size of the pool, its condition, and cost to maintain it will play a role. Be ready to disclose all of these factors to buyers.
A pool can add value to your home under the right circumstances. Talk with a local appraiser or real estate agent before adding one to your home. Know the average increase homes around you earned with a pool. Compare that increase to the investment it will cost you to decide if it’s right for you.