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Should You Buy a Swimming Pool?

{ Posted on Sep 24 2010 by Marcus Alston }

Should You Buy an In-Ground Swimming Pool?  This is the same question I have been asking myself for years now.  As the ConsumerMiser, all my information and instincts are telling me it does not make financial sense.

I have tried to rationalize it by trying to convince myself that the enjoyment my family will get out of it outweighs the cost.  After saying this did not convince me, I told myself that we would fund it by not taking vacations.  Instead, we would have a “staycation” and take off a week from work together and stay at home for a week and just hang out by the pool with the kids.  Not a bad idea, except after doing my homework, I found that NOT taking a vacation would arguably just cover the ongoing maintenance cost of a pool and would not address the cost of financing the pool which we would have to do.  Additionally, in order for me to rationalize the pool purchase, we would have to NOT take a vacation for as a long as we maintained the pool which would be 15-20 years in order to make it make financial sense.  That’s a long time NOT to take a vacation.  And would we really NOT take a vacation every year?  Probably not.  So our annual spending would go up significantly and our debt would go up some in the short term.

Buying  a House with a Pool.  I also thought about buying a house already with an in-ground pool, but we were out bid on the one house we bid with a pool years ago during the “buyer’s” market and we are pretty attached to our current house and the neighborhood.  Buying a house with a pool would eliminate the need to have one built and probably reduce the costs of a pool overall, but you would still have to deal with the various costs of owning a pool (read on).

Think Through the Costs.  Simply put, buying and or having a pool is a money pit.  It is not an investment, but a drain on resources.  It’s also a liability.  Consumers tend not to think through the short term and long term (hidden) costs, but instead focus on the idea of having their very own pool right in the privacy of their backyard (or front).

In-Ground Pool Built.  Assuming you have a pool built, you could pay roughly $30,000 to $50,000 for an average medium sized in-ground pool with no frills.  Extras, are well, extra.  A concrete skirt around the pool, waterfall, side hot tub or fence (which is required by law in some states), will cost you.  And don’t forget the landscaping after you have dug up your yard.  Oh yeah, a delivery of water could cost you up to $700 or more depending on the size of your pool.  And I have not even made it to the daily, weekly and monthly maintenance costs.

Chemical Costs.  Chemicals may run $500-$800 a year.   Costs can vary by region. If you live in a colder state you may also have to winterize your pool during the winter and will need to open and close the pool at the start and end of each summer, which may cost you at least another $500 a year.

Novelty; A Hassle; Do it Yourself vs. Pool Service Costs.  Many people treat their new pool like a Wii game console.  They are really into it at first, but the novelty wears off and they rarely use it.  Additionally, the repairs and opening and closing costs of getting the pool ready are a deterrent for some to even open for the season, let alone swim in it on occasion.  Even if you have the money, maintaining the pool can be a hassle, and many hire a pool service company.  This of course costs more money.  Pools in colder climates require more maintenance so pool companies charge more in these areas.

Electric Bill, Liners, Repairs and Other Costs.  Then there is the electric bill for the pumps, filter and heater.  Some estimate this cost at $100 per month.  Then there may be costs to replace liners, pool covers, or to repair leaks and cracks.  Again, in climates with real winters, your pool will go through more wear and tear.

Insurance.  You will need to make sure that your home owner’s insurance covers your  pool and injuries to people that may use your pool.  This coverage will be an additional cost as well.

Maintenance Costs. Some financial planners estimate monthly maintenance costs at $3,000-$5,000 a year if you do it yourself or about $4,500 to $7,500 if you use a pool service.  A good rule of thumb is your pool will cost you 10% of the cost of the pool to maintain it every year if you do it yourself or 15% if you have a pool company maintain it for you.  Wow, imagine what you could do if you made just (this would be nice) an 8% return on the money you would spend on a pool (say $50,000).  Under the Rule of 72, it would double in 9 years (to $100,000) or in 14.4 years if it only makes 5% per year.  Hmmm, $100,000 in the next 9-15 years, I think I could use that towards retiring early, the kids’ education, building wealth, controlling debt, paying down or off the mortgage, investing in real estate, etc.  You get the picture.  And what if you borrowed that $50,000 in the form of a loan from a bank to buy the pool and the bank charges you 7-10% interest.  You could look at the total cost costing you roughly 15-18% on your money per year in opportunity costs lost.

Pool Impact on Property Value.  You almost certainly will not get close to the value for the pool that you spend on it initially unless you are in an area where pools are expected to accompany the house.  In many cases it can make your home harder to sell because some potential buyers see pools as a liability and burden.  Some sellers will offer to fill in the pool, offer a credit, or reduce their price just to attract buyers.

Conclusion.  Unless a pool (cost of building it and the annual maintenance) fits in your budget (this should go without saying) and you have your retirement, the kids’ education, investments, and an emergency fund on track, and no or very low credit card debt and no other bad debt, I strongly advise passing on a pool (If you can pay for your pool with cash and not credit and or you have saved enough money specifically for the pool, this is a good sign you can afford it).  If you have all this under control, then maybe you deserve a pool.  An affordable and less hassle alternative may be using the local public pool, the neighbor’s pool, joining the local swim club or YMCA/YWCA.

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