If you’re thinking about selling your home in the next few years, making improvements can help boost its appeal. But not all upgrades add value when it’s time to sell. Some projects cost more than they’re worth, leaving you with little to no return.
"One of the most common questions homeowners ask when they’re considering a renovation is, 'How much will this increase the value of my home?' With the majority of home renovation projects, you won't make back the money that you put into them, but that shouldn’t discourage you from doing them if they’ll improve your happiness or the functionality of your space," shares Liz Young, Founder & CEO Realm (the one-stop destination for homeowners looking to renovate that provides expert guidance, reliable contractors, and a customized plan for your remodeling project). "That said, if your primary goal is to increase your home’s long-term value, there’s one project you should avoid: adding a swimming pool."
We get it. Depending on the season and your location, building the best outdoor living space feels like a must. But believe us, there are better ways to do it than adding a pool. "Pools have an average ROI of -81%. ROI, or return on investment, is calculated using this formula: (Home value increase from pool - cost of pool) / (Cost of pool)," reports Young. "This means that you’ll lose 81 cents for every dollar spent on building your pool. So if you spent $50,000 on your backyard pool, you would lose approximately $40,500 when you later sell your home."
Why Pools Have a Low ROI
Young breaks it down for us:
- They’re expensive to install, with an average cost of $51,254. The installation costs include excavation, materials, labor, and landscaping.
- They require ongoing maintenance, which can deter potential buyers. The cost for cleaning, heating, chemicals, and repairs can quickly add up, and the actual time and effort spent maintaining it can outweigh its benefits. Additionally, insurance requirements can also add to the cost of having a pool.
- They aren’t appealing to all prospective buyers. For example, while some families with children might think a pool has equity, others might view them as safety risks. Even above-ground pools may not be considered appealing in cooler climates where they’ll get less use.
Geography Doesn’t Change the Math
"While you may assume that pools have high returns on investment in all warm climates, that actually isn’t the case. In fact, the states with the lowest ROI for pools are Louisiana and Florida, with -89% and -87%, respectively," highlights Young.
"If you’re looking for an outdoor home improvement project with a better return on investment, consider adding square footage with outdoor spaces, such as patios and decks, refinish your hardwood floors, or enhance your landscaping. These projects not only improve curb appeal but also attract a broader range of potential homebuyers."
But you really, really want a pool?
If you plan to stay in your home long-term and know your family will enjoy a pool, it might be a worthwhile investment. In some high-end neighborhoods where in-ground pools are the norm, a real estate agent might tell you that having one could actually hurt your sale price. But if you’re adding it purely as an investment, the numbers don’t work in your favor.
