An in-ground swimming pool typically involves a much more sizable investment than an above-ground pool. While pools may bring you recreational and social benefits, the jury is mixed on whether an in-ground pool makes for a good investment. A lot of variable factors impact the financial return you experience when you sell a home with a pool.
The first step in figuring out whether an in-ground pool is a good investment is knowing how much one costs. Typical in-ground pools range from $10,000 to $40,000, according to Courtney Ronan in her Realty Times article "Taking the Plunge: A Few Pool-Building Pointers." The high end of this range certainly has an upside if you want to build a bigger or more glamorous pool. Along with the actual investment in the pool construction, consider the increased property taxes you will see plus the added liability insurance premiums you will pay to protect yourself.
Increased Market Value
Financially, the return on your investment comes in the form of a higher resale price for your home. The difference between what your home sells for with the pool and what it would have sold for without it is your investment return. It is hard to put an exact dollar amount on the difference because returns vary in each individual home sale. However, real estate agents indicate the added value can range from next to nothing up to a 15 to 25 percent on the value of your home.
Returns on your pool investment depend significantly on your geographic location. In warmer climates where pools are more common, not having a pool can drastically reduce the amount of buyers that will look at your home. This lowers your overall demand, and subsequently, the likely sale price. A pool has more functional value in a tropical climate than it does in a four-season area, which only allows for three to five months of use a year. The level of maintenance required for the pool also affects your return on investment. For one, your time is worth something and all of your hours maintaining the pool go against your higher resale potential. Plus, new buyers will consider the level of maintenance required.
The financial investment value of an in-ground pool is certainly debatable. However, if you stay in the home for a long time and get a lot of social and recreational value, the practical returns combined with the financial benefits may mean it is a good idea to build. From a purely financial standpoint, garages and painting are better investments, with returns commonly at or above 70 percent on investment, according to Ronan's article.
Neil Kokemuller has been an active business, finance and education writer and content media website developer since 2007. He has been a college marketing professor since 2004. Kokemuller has additional professional experience in marketing, retail and small business. He holds a Master of Business Administration from Iowa State University.