WRITTEN BY RUDYARDPOSTED ONSUNDAY, 12 MAY 2019 05:30
Questions that are often asked of real estate agents by homeowners who have pools include how much can be added to the sale price and can the costs of installing a pool be recouped in a property sale.
The answers depend on several factors, which we will discuss here, but generaly the answers are not what sellers want to hear. But they can be good news for buyers.
That’s because whilst homes can appreciate in value, pools do not. A pool is like a motor vehicle – once it has been used, its value starts depreciating, and a pool that is more than 10 years old would have almost no value at all in a real estate transaction.
Of course, there are exceptions to that general rule. A well-constructed concrete pool using high-quality materials in a high-end property, and which has been well maintained throughout its life, is still going to have value after 10 years.
Mr Pool Man, a leading supplier of high-quality pool pumps and filtration equipment, says the condition and quality of the pool fixtures and fittings that have been used also has a big impact on whether an older pool can hold its value. But the average quality pool in a suburban home is likely to depreciate at around the same rate as a motor vehicle – a large drop in value the first year, and then steadily decreasing until there is not much resale value left at the end of a decade.
So the answer to the question as to whether the cost of installing a pool can be recouped in a property sale is almost certainly no.
As to the question of how much can be added to the sale price to reflect the value of the pool depends on a range of other factors aside from age:
Type of pool
Only professionally constructed in-ground pools with a shotcrete, gunite or tiled finish are capable of holding much value beyond 10 years. Even then, the value is going to be largely dependent on its condition and the quality of fixtures and fittings.
Any noticeable cracks in the surface of the pool – even without any evidence of leakage – is going to reduce its value.
Many manufacturers of fiberglass pools claim their pools can hold their value as long as concrete pools. Technically that is true (at least for the first 10 years), but in practice most homeowners don’t keep the water quality at an optimum level throughout the year, and this often results in premature discoloring of the gel coat finish on the fiberglass.
Any discoloring of the surface of the pool is going to result in the pool looking older than it might really be, thus having some impact on the amount that can be added to the selling price of the property.
Pools that have a vinyl liner are the cheapest to install and this is reflected in the fact that they have the lowest resale value. Vinyl liners have to be replaced every five years or so, so unless the liner has been fairly recently replaced, it is unlikely that the value that a buyer would place on this type of pool would be anything close to its installation cost.
After the age and the type of the pool, the factor that has the most influence on the extent to which the selling price of the property can be inflated to recoup some of the installation costs of the pool is whether the buyer is actively seeking to buy a property with a pool.
This is where the issue of how much to add to the selling price becomes very subjective because whilst some buyers – families with children for example – may be actively seeking a house with a pool, others may be ambivalent about whether the property has a pool or not.
In fact having a pool may even turn away some buyers who do not want a pool because whilst a pool may enhance the look of a house and garden, if the new homeowners have no intention of using it, they will need to still spend money on keeping it maintained to avoid it becoming unsightly with green algae.
Rule of Thumb
So with one of those factors being so subjective, how is it possible to estimate a figure to add to the sale price of the house to account for the value of the pool? A good rule of thumb is to work out what the cost of installing the pool represents as a percentage of the cost of building or buying the house. Generally that figure is around 10-15 percent. Then take half that figure and apply that percentage to what would have been the sale price of the house. So, for example, if the cost of building the pool was 12 percent of the cost of building the house, then increase the selling price of the house by 6 percent.
Of course, that price needs to be compared with the market price of similar properties that may have been sold in the same area, and for older houses with older pools, that figure may end up only being a starting point from which you will have to negotiate, but at least you will have a figure that represents the maximum likely return from a house and pool sale