Are Pools a Good Investment? A Financial Analysis
Gain a clear financial perspective on pool ownership. Understand its true impact on your home's worth and the realistic long-term costs involved.
A swimming pool can transform a backyard into a private oasis, offering enjoyment and a refreshing escape. Many homeowners consider adding a pool, often wondering if it represents a sound financial investment. Understanding the financial implications is important. A pool’s value encompasses various costs, potential impacts on property value, and ongoing expenses.
Impact on Property Value
A swimming pool’s influence on a home’s resale value is not always straightforward. Generally, a pool does not add dollar-for-dollar value equal to its installation cost, and homeowners often recoup only a fraction of their investment, sometimes around 56% of the initial outlay. Inground pools, unlike their above-ground counterparts, are considered permanent fixtures and can contribute to a home’s value, typically increasing it by 5% to 8% on average. Above-ground pools are usually classified as personal property and do not generally enhance a home’s appraised value.
A pool’s value depends on factors like local climate and neighborhood expectations. In regions with warm climates and extended swim seasons, a pool is often considered an expected amenity and can be a significant asset, potentially fetching higher selling prices. Conversely, in colder areas where pools can only be used for a few months each year, their perceived value diminishes, and they might even deter potential buyers.
Home appraisers assess inground pools as part of the real estate, factoring them into the property’s overall valuation. For a pool to contribute “full contributory value” in an appraisal, it must be in operable condition and free from structural defects. However, the perceived value for a buyer who specifically desires a pool can differ from the objective appraised value, as some buyers view pools as a significant liability due to maintenance and safety concerns.
Financial Considerations of Ownership
Owning a swimming pool involves a substantial financial commitment. The installation cost for an inground pool can vary widely, averaging around $65,000, but ranging from $25,000 for basic models to over $100,000 for more elaborate designs. Specific types also vary, with vinyl liner pools typically costing $25,000 to $65,000, fiberglass pools $30,000 to $85,000, and concrete pools $50,000 to $150,000 or more. Above-ground pools are less expensive, with total installed costs ranging from $1,600 to $7,500, including the pool kit and labor.
Beyond the pool itself, additional upfront expenses include:
Permits, typically costing between $100 and $1,800.
Surrounding decking, which can add $3,000 to $20,000 depending on materials.
Fencing, often a safety requirement, costing $1,500 to $10,000.
Site preparation like excavation, ranging from $2.50 to $15.00 per cubic yard, or over $200 per cubic yard for challenging conditions.
Ongoing costs of pool ownership include maintenance, utilities, repairs, and increased insurance and property tax obligations. Routine maintenance, covering chemicals, cleaning supplies, and testing kits, averages $80 to $150 per month, or $960 to $1,800 annually. Utility expenses will also increase, with electricity for pumps and heaters adding $50 to $300 monthly, and increased water usage potentially adding $30 to $50 per month.
Components wear out over time, leading to repair costs. Replacing a pool liner can cost an average of $2,503, with ranges from $1,240 to $3,869, while an inground liner replacement might be $3,800 to $6,500. A new pool pump, crucial for circulation, averages $1,300 for replacement, though costs can range from $160 to $6,000 depending on the type and size.
A pool also impacts homeowner’s insurance premiums due to increased liability risk; pools are often categorized as an “attractive nuisance.” Insurers may recommend increasing liability coverage, potentially adding $17 to $25 to monthly premiums or $50 to $75 annually. Additionally, an inground pool is considered a permanent improvement that enhances property value, leading to an increase in annual property tax assessments.
Market and Property Specific Factors
The financial viability of a pool as an investment is influenced by external market conditions and specific property characteristics. Climate plays a significant role, as pools tend to be more valuable and desirable in hot, sunny regions with long swimming seasons. In these areas, a pool is often seen as a standard feature, and its absence might negatively impact a home’s appeal. Conversely, in colder climates with limited usability, a pool may be viewed as an expensive liability rather than an asset.
Neighborhood norms are also influential. In luxury communities where pools are prevalent among properties, having a well-maintained pool can be an expectation, and not having one might make a home less competitive. However, in neighborhoods where pools are rare, adding one might not yield a strong return on investment if the majority of buyers in that market do not desire such an amenity.
The size of the property’s lot is another important consideration. A pool that consumes a disproportionate amount of yard space can be a deterrent to potential buyers who value outdoor living areas for other purposes. Maintaining a balance between the pool and usable yard space is important for maximizing appeal.
The type, quality, and aesthetic integration of the pool with the home’s overall style significantly impact its perceived value. A custom-designed, high-quality inground pool that complements the home’s architecture will generally add more value than a basic, poorly maintained, or above-ground unit. An expensive, elaborate pool on a modest home might be considered an “over-improvement,” where the cost greatly exceeds the incremental value added.