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What You Should Know If You're Thinking about Financing a Swimming Pool

Posted by Denise on 09/26/2014

A swimming pool with a fountain and lion sculptures

It's easy to see why any Oklahoma City area homeowner (or would-be homeowner) would want to think about installing a swimming pool on their property. An increasingly popular trend in home improvement and renovation projects is adding or enhancing outdoor living spaces.

With the hot Oklahoma summers, the prospect of relaxing and cooling off in your own backyard swimming pool is incredibly enticing. As anxious as you might be to turn your outdoor area into a resort-like oasis, there are a few important things to consider. Before you sign the dotted line with a lender to get financing, think about these important considerations. Make sure you understand all the added costs involved in creating a staycation retreat in your own backyard.

Complying with Local Building and Safety Code Requirements

As a homeowner, you have certain responsibilities for maintaining your home and property. When you install, or think about installing a swimming pool, you need to be mindful of many other considerations. Before going ahead with your swimming pool purchase and installation, contact the city or county office that handles building and safety codes and permits.

The Insurance Information Institute explains that every city, town or municipality defines the term “pool” differently. The way local governments define a swimming pool is generally determined by the size and depth of the structure.

Most people want swimming pools that are large enough for a lot of play and maybe even diving. That means they'll meet municipal definitions, and you'll have to comply with the local building and safety codes.

That also means that you'll need to apply for a building permit, and you'll have to pay the application fee. You will also have to pay to have a building inspector inspect it and sign off on the construction and safety features you have installed to prevent drowning.

Homeowners Insurance

According to Zacks Financial Research, most homeowner’s insurance policies consider swimming pools as additional outdoor structures that are included in the dwelling coverage portion of the policy. What a standard homeowners policy may not do, however, is give a homeowner enough liability coverage. Having a pool on your property increases your liability risk substantially.

The Insurance Information Institute recommends that homeowners increase the amount of their liability protection on your homeowner’s policy to as much as $500,000. Don't be surprised if your insurance provider asks for proof that your pool meets the local building and safety code requirements, and you give them proof to that effect.

The Insurance Information Institute Home Buyers Checklist suggests that home buyers who are thinking about buying homes with swimming pools consider buying an umbrella liability policy to add to their homeowners insurance. Homeowners who are considering a pool installation on their own property would be wise to add this extra cost to the total cost of financing a pool.

Don't Assume a Pool Will Add Value to Your Home

National Association of Realtors expert Julie Sturgeon at HouseLogic warns homeowners against automatically thinking an in-ground pool will add value to their home. In most instances, it doesn't.

However, if you live in a high-end neighborhood where every other home has a swimming pool, and yours doesn't, you may not sell your house as fast as you'd like. Worse yet, not having a swimming pool in a neighborhood where every other house has one, is going to hurt you financially - when you try to sell it. You won't get as much money as you would with the pool.

Under ideal circumstances, a pool may eventually increase the resale value of your home by 7 percent, if that – but that's not a guarantee. Think about practical considerations:

  • If you're going to add a pool, make sure that you choose one in a style that fits your neighborhood.
  • Do you have enough outdoor space for kids to play, for a barbecue and dining area, or to have a garden?
  • Are you or other family members willing or able to accept responsibility for the upkeep of the pool and all the equipment?
  • Think about how old the pool will be when you might be ready to sell your home. If you install a pool now, don't expect to recoup any of the cost of installing it ten or more years from now, unless you do the necessary updates before putting it on the market.

Actual Cost of Pool

At the minimum, if you choose to install a 600 square foot concrete pool, the cost of the pool and equipment would be $30,000. Understand that this doesn't include any lighting, the safety fence that state laws require, or other features you may add to the pool, surrounding landscaping or a spa or hot tub.

Heating and Filtration Equipment

Expect to shell out at least $500 for the filtration pump for your pool. It is not just one of the most important pieces of equipment for maintaining your pool; it's also the most expensive to run. Resist the temptation to go with a cheaper filtration pump because you'll wind up paying way more in utility costs to run it. The added upfront costs of an energy efficient filtration pump will cost you less in energy costs over the long term.

Cost of Maintaining Your Pool

Seasonal maintenance costs just for the chemicals to clean the pool, balance pH levels, and keep alkalinity and calcium at the right levels, will run you around $600 for the year, if the pool is only used from Memorial Day to Labor Day – and that's the cost if you do all the work yourself. If you don't want to have to vacuum the pool manually every week, you can spend another $500 to $800 to get a robotic vacuum to do it for you.

Since you probably won't keep the pool open all year, you'll need to have the pool professionally opened at the beginning of the season and shut down at the end of the season, for an annual cost of $1000.

Since there is always the possibility that adding a pool will raise the cost of your property taxes, the National Association of Realtors urges homeowners to be careful about setting a budget for a swimming pool on their property, making sure that it sticks to a range that is within 10 to 15 percent of the price they paid for their home.

Finally, understand that the cost of financing a pool includes a lot more than the installation and construction. Don't forget about the cost of building permits, safety fences, and extra liability insurance or umbrella coverage you should seriously consider adding to your homeowners insurance.

Add up the cost of your supplies, any professional service (like opening and shutting down the pool for the season,) and the utilities you'll have to pay for to keep it running. When you've figured out how much everything is going to cost, think about how long you'd have to pay for the upkeep on the pool. The total of all of this is what you should consider when thinking about financing your swimming pool.

Make safety a priority. Even if you have to install an alarm system to alert you when someone tries to get through the swimming pool gate, the peace of mind you get from going above and beyond is far more valuable than the money you'll pay to alarm the fence.

Be sure to contact the staff at  Blue Haven Pools to discuss the swimming pool and spa possibilities for your property.