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Avoid the over-capitalisation trap: Swimming pool profits and perils

By Tim Neary
18 January 2018 | 9 minute read
caution reb

South-east Australia is bracing for another heat wave, so it’s wise to consider the financial benefits, or not, of building a swimming pool to cool off in the warmer months. However, just because they have one, home owners shouldn’t expect the value of their property to rise automatically.

According to Gil King, CEO of the Real Estate Institute of Victoria (REIV), the additional value a pool can add to a property is dependent on a variety of factors, such as the type of property, the current landscaping situation and the size of the garden.

“A swimming pool is likely to add greater value to a family home rather than a smaller property suited to downsizers,” Mr King said.

The location of the property, the CEO adds, is another vital factor, as some areas — which include the Mallee, Northern Country, North East and the Wimmera — can have summerlike temperatures before or after the season.

“If you’re thinking of installing a pool, look for a design that suits your backyard and doesn’t overwhelm your garden,” Mr King suggested.

“Given the variety of pool sizes and shapes now available, a pool can be incorporated even in areas where block sizes are decreasing.

“A pool should complement a property with clever landscaping integrating indoor and outdoor living space, ensuring safety barriers comply with local and state standards is also installed, particularly if the property is being rented out.”

While pools can add value, they can also over-capitalise a property and lose out on sales to comparable homes that are pool-less.

“A local real estate agent will be able to provide home owners with advice on comparable sales in the area, both homes with and without a pool,” Mr King said.

“For vendors, the presentation and maintenance of your pool will go a long way to determining how much of an asset it is when it comes time to sell. A neglected pool can be an eyesore, so ensure the pool is vacuumed and clear of leaves and other debris.”

If investors are interested in adding a property with a pool to their portfolio, Mr King stressed that it is important to check that the fencing is compliant with the local council, as repair or replacement may end up being costly.

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