The coronavirus pandemic forced a lot of people to change their lifestyles. For many, that meant spending more time at home -- whether they wanted to or not. So, it's no surprise that to soften that blow, a lot of property owners attempted to improve their homes over the past 18 months.
Some owners worked on finishing a basement for additional living space or to serve as a home office. But many property owners put their home improvement dollars toward pool installations.
Sales of residential inground swimming pools rose 24% in 2020 -- a historical increase, according to the Pool & Hot Tub Alliance (PHTA). In fact, in some markets, the demand for pools is so high that homeowners are being put on multiyear waiting lists.
If you're a real estate investor who owns income properties, you may be wondering whether it pays to have a pool installed. Doing so could not only raise the value of your property but also help you command a premium for rent. This especially holds true if pools are harder to come by in your neighborhood. But before you rush to get on a contractor's radar -- and end up in over your head -- you may want to consider the drawbacks of installing a pool.
Why pools don't always pay
As much as a swimming pool can increase your property's resale value and enable you to command more rent for it, it could also end up being a huge hassle logistically and financially.
First, there's the cost of installing a pool. HomeAdvisor says that an inground pool will cost $53,183 on average. The more bells and whistles you want, the higher that tab will be. And while you may get some of your investment back at resale, don't expect to get all of it. Most home improvements don't offer a 100% return on investment.
Pools also take a lot of work to maintain. Basic upkeep costs $1,200 to $1,800 a year, reports HomeAdvisor, but if you need to outsource much of that maintenance, expect to spend more.
Of course, that figure doesn't include repairs. And while those may be minimal while your pool is fairly new, in time, they could end up costing a bundle.
Then, there's insurance to think about. Your premiums could skyrocket once you have a pool installed, namely because you'll generally need to increase the amount of liability coverage you have.
It's for all these reasons that a pool may not be a good investment for you. This especially applies if your income property is located someplace where a pool can't be utilized all year long.
But there is an exception
A pool may not be the best thing to sink money into -- unless you own a vacation rental, where having a pool will give you a definite edge over competing properties. In that case, the amount of extra rent you may be able to charge could help you recoup that expense and then some.
Imagine you commonly charge a weekly rate of $1,500 to rent out your vacation home. Depending on your local market, a pool might enable you to raise your weekly rental rate to $2,000. If your rental is occupied 40 weeks out of the year, that's an extra $20,000 you're pocketing from that pool alone (minus the taxes you owe on your rental income, of course).
The Millionacres bottom line on swimming pools
The pandemic may have fueled a surge in swimming pool installations, but that doesn't make a pool a smart investment. In fact, for the amount you might spend on a pool, you may be able to go out and put a down payment on another income property. And that could end up being a smarter use of your resources.