Homeowners and buyers both wonder about the value of an inground swimming pool. Does it add value to the property, and if so, how much?
You have to appreciate that a swimming pool is a depreciating asset. It’s much like a car. When it’s new, it works well and is certainly an asset, but at a certain point in time, it’s old, and it needs repair. Sometimes, it should just be turned in at the dealership for a new one.
A swimming pool can be an asset or a liability. Good pools add value, sometimes, more than the actual cost to construct them. However, that’s rare, most of the time, at best, and relatively new, they add about 75% of their value to the real estate. That’s just about as good as it gets. New kitchens add about the same amount (75%).
Nevertheless, just as 50 year old kitchens require replacement or renovation, the same is true with swimming pools, and this can be quite a costly undertaking.
First, let’s stick with inground swimming pools. The advantage of an above ground pool is that you might be able to take it with you. However, they at best, only offer marginal additional value to a home. Even buyers who want a pool, often don’t want an above ground pool.
Many people like to circulate “old wives tales” about pools: like, for example, they add “no value” or they “detract” from the value. The mere fact that a pool sometimes does not add value and sometimes detracts value, does not make it true all the time. The same thing happens with kitchens and bathrooms.
Let’s look at the car example. Sometimes, you will find that a Toronto owner of a Florida condominium wants to sell the condo. And, he has a car which has Florida plates and it’s there parked and available all year round.
Now, does it add or detract from the condo?
Naturally, it could do either! Until I tell you want kind of car it is, how old it is and what condition it is in, then you wouldn’t really know whether it’s an asset or a liability.
So, let’s say it’s a 2013 Corvette convertible, 10,000 kms, great shape, just driven in good weather and worth $80,000.00. Then, you’ll be inclined to pay another $80,000.00 for the car, and hope that you’ll get a deal because you’re buying both.
Assume, that it’s a 1981 Impala, 277,000 kms, originally from Canada, caught in a flood with water up and over the windows, then, sent to Florida to help it dry out. On the resale market, it’s worth $300.00, its scrap metal value.
In all likelihood, you won’t even want it as part of the deal. It’s parked now in the underground garage but it won’t start, it needs a tow. This car is a liability.
So, it goes with swimming pools. Some add value, some don’t.
Which pools add value?
The pools which are:
- Relatively new
Which pools do not add value?
The pools which are:
- Older (an out of date)
- In need of repair and maintenance
- Costly to renovate
What’s the economic age of the pool?
The pool itself will have a useful age, as well as a chronological age. How long will it last before it requires extensive repair or renovation? The same question could be asked about a roof or a kitchen.
A pool which is gunite could last years. Gunite is pressurized concrete and should last many years without a problem. But, that’s just the underlying structure. The heater, the filter, the chlorinator, the pump and the lines are all going to wear out at the same rate as any other pool.
So, a 30 year old gunite pool may be fine structurally but require replacement of its circulatory system at a cost of $5,000.00. Then, it’s good for another 15 years and so on.
Every 20 years, the gunite pool will require a new interior plaster surface. This is usually called “marbleizing”, but on occasion, these pools will be painted. This is expensive, often running in the range of $3,000.00 to $5,000.00 for an average sized pool. But, once it’s done, you’re good for another 20 years.
In cases, where the pool was constructed of concrete (not gunite) and is painted each year rather than marbleized, the maintenance costs can be prohibitive. Perhaps the concrete has shifted, or there is a leak. This can be very, very expensive. This type of pool is 30, 40, or 50 years old, and rarely used in construction today. Many times, this old concrete pool will represent a liability rather than an asset.
Let’s also consider what is now the most popular type of pool today: the concrete base, galvanized steel walls, and vinyl lined pools. These are easy to maintain, and every 20 years require replacement of the vinyl liner at a cost of $3,000.00 to $5,000.00.
Styles and products change with the times. What was very cool and very “in” during the 1970’s may be out of date today. Remember harvest gold and avocado green appliances?
The same thing applies to pools. The tiles and coping that were state of the art, and represented a substantial upgrade may be out of date today.
A good deal of the value of a pool rests in the landscaped setting. The deck, the sitting area, the eating area, the barbeque, the firepit, the night lighting, the heat lamps, the cabana, the hot tub and other items can all add thousands to the value. And, if they are in poor shape or require maintenance, they may even be liabilities. Who wants an old hot tub from the ‘70’s that doesn’t work and is just an eyesore?
So, just like assessing the value-added proposition of the Corvette or the Impala to the Florida condo, a pool can be either an asset or a liability.
And, forget about the “old wives’ tales”, if someone wants a pool, they’ll pay for it. In fact, some people want a pool sized lot, so they can construct their own from scratch. So, they are reluctant to pay a lot more for a pool. These same people don’t want to pay for your cheap renovated kitchen. They want to rip it out and start from scratch. They won’t be adding anything to the purchase price for your $10,000.00 kitchen. They want a $40,000.00 kitchen!
In every case, the property must be evaluated and considered on its own facts.
Is the landscaped backyard with a pool, a plus or a minus, and by how much?
Consider all the facts, then do your “evaluation”.
Brian Madigan LL.B., Broker