When’s it okay to put a pool on the house?

‘Never, it should go next to the house!’ – said some smart-ass in the corner.

You know what I’m talking about right though- you own a home with a backyard that’s simply crying out for it – ‘gimme a pool!!!’ You potentially had one as a child and you had fond memories of having your friends over for an endless summer, listening to Billie Jean, doing belly flops on your brother in the shallow end. We had a pool briefly as a child – it had a sign that said: “notice that there’s no ‘P’ in our ‘ool’, let’s keep it that way”. Good times.

We own a pool now – got it with the house and to be honest I discounted the price we were willing to pay because of it. It needed work and we only just finished spending about $150k renovating it! It is awesome though – our kids thoroughly enjoy it and one day when they get older, I hope it becomes a place where they’ll bring their friends over (that way at least I know what they’re getting up to!).

So, when’s it okay to pop a pool on the house – is it ever okay to borrow, to pay for a pool to be installed? Watch the video here.

Personally, I think it comes down to your definition of wealth? Is wealth just money to you, or do you have a more holistic definition?

If you define wealth as having money, (or ‘loads of equity’ in your home), borrowing to get a pool does not always provide a ‘net-gain’ in the value of your home. Normally the $100k you think it costs to get one installed is more like $150-$200k after you factor in the deck, concrete surrounds, retaining walls, plumbing, heating and filtration. Sure, your house may be worth a bit more in the end, but you’re lucky if it values up to the corresponding amount of debt it took to get you there. You don’t see many property developers putting in pools for a quick flip, do you?

Don’t despair though – If you’re open to augment your view of wealth it may help justify getting a pool still. Spending time with your kids after school, fewer holidays away as your home is more like a resort – you get the idea. Isn’t wealth just money after all is it? Isn’t wealth also about having time, health, and people to enjoy good times with? Would you rather waste your wealth on an older, more decrepit, and angry version of yourself, or is it time to start enjoying your life sooner?

Financially speaking though let’s quickly look at the numbers, shall we? Let’s say that you’re living in a home that you’d like to stay in for 20 years, which is when you’ll retire (ideally debt free with money in the bank!). Borrowing $150k to get a pool installed will cost you around $950 per month for 20 years (at 4.5%). Think you can manage that? Well, if you can afford it, and it still fits with your newly defined version of wealth now, then why not? I can sense a couple of elbows being poked into partners as I type!

Of course, this is not financial advice, but it’s worth going through the logic – if you can do this, maybe you should. Life really is too short right?