Does your dream home include a pool in the backyard? You aren’t alone and we can understand why. Pools are relaxing and of course, fun for the kids. But, let’s face it, your home is an investment. So we have to ask the question – does a pool add or take away value from your home?
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The Market Plays a Big Role
The value of your home, with or without a pool, is dependent on the real estate market at the time of the appraisal. Appraisers will walk through your home and note the size, features, and condition. They will then pull information of homes just like yours that sold within the last six months within a short distance from your home.
The appraiser will compare homes with and without a pool that sold recently. Did the homes with a pool sell for more than the homes without a pool, all other things being equal? This is the largest indicator whether a pool will add value to your home.
What Factors Play a Role?
The largest factor that helps appraisers determine whether a pool adds value to your home or not is your location. Do you live in Florida or another southern state where the weather is hot a good part of the year? In this instance, a pool may add value. If you live in the Midwest where the weather is only hot for maybe three months out of the year, it could be a different story.
Another factor is the type of pool. Is it above or below ground? Does your pool match the style/type of the pools in the area? What is the condition of the pool? The appraiser will look at these factors to help determine the value the pool adds to the home.
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For example, if you have a luxurious in-ground pool, but the comparable sales around you all had an above ground pool, you may not get as large of a return on your in-ground pool that you thought. The same goes the other way around. If your neighbors all have in-ground pools and you put in an above-ground pool, your return on the investment might be very slim.
The Maximum Return
You may be surprised to learn that the average return on investment for a new pool is just 7%. A pool can cost you anywhere from $20,000 to $30,000. This means you might only see a return of $1,400 to $2,100. That’s not a very large return based on the size of the investment.
Don’t forget you also have to pay for maintenance and upkeep of the pool. Your utility bills will likely increase as a result of running the pump and/or heater all summer. Plus you need to purchase chemicals or pay someone to maintain the pool’s cleanliness.
A pool is a luxury that may or may not increase your home’s value. If you install a pool simply to increase your home’s selling price, you may want to refrain from it. If, on the other hand, it’s always been a dream of yours, just know in your mind that the return on your investment will be very minimal. The return will be more of a material thing as you and your family enjoy the relaxing pool on a hot, summer day.