Located in the northwestern corner of Florida, the Florida Panhandle is one of the top vacation destinations within the United States. The weather is fantastic and the beaches are stunning. As an investor looking to buy a Short Term Rental (STR) in the area, finding the right home might be a difficult decision, so we’ve crunched the numbers and determined whether your home should have a pool, which is a crucial decision when purchasing in warm climates.   


Daily high temperatures average 82 degrees Fahrenheit during the summer and 66 degrees throughout winter in the Panhandle area. Since temperatures in the Panhandle area can get pretty warm, pools are very desirable for many vacationers looking for an STR.

Notably, on average, homes with a pool tend to make $20,000-30,000 more rent per year than homes with similar square feet and no pool.


As an investor looking to buy a home with a pool to get a higher cash flow, this begs the question, should you buy a home with a pool or buy a home without a pool and then install the pool later? Furthermore, which one of these options is cheaper?

To answer this question, we first analyze the price difference between homes with pools already installed and homes without. Overall, homes with a pool in Panhandle are $450,000 more expensive! Now, if we were just trying to tell an uncomplicated story about buying a home without a pool, we could finish the article quite quickly. We would conclude that after all the expenses involved with building a pool are included, by buying a house without a pool, you would save around $390,000. Sadly these savings are just an illusion. 

The real reason for the large gap between the price of homes with a pool and the price of homes without comes from square footage differences. For example, homes with pools tend to have an additional 630 square feet, which can account for as much as $350,000. With this information in mind, building a pool could save $40,000; however, this too is an oversimplification.

To be as accurate as possible, we split our data into categories such that each represented a range of 200 square feet. Then, by computing the prices of homes with and without a pool, we determined the differences in each of these categories. We also calculated the average CAP rate, expected occupancy percent, estimated rent, bedrooms, and bathrooms for homes within each range. This analysis led to a surprising observation: houses with pools tend to have more bedrooms and bathrooms than homes without pools, even in similar square foot ranges. 

For example, from 2800 – 3000 square feet, homes with a pool tend to have five bedrooms and five bathrooms, while homes without a pool tend to have four bedrooms and four bathrooms on average. As seen in the below graphs, an increase in bedrooms and bathrooms generally causes an increase in the price. Therefore, we want to compare homes with a pool in the 2800 – 3000 square foot range to homes without a pool with similar bedrooms and bathrooms. 

Continuing with our example, we calculated that for homes between 2800 – 3000 square feet, 5 (+/- 1) bedrooms, 5 (+/- 1) bathrooms, and no pool or hot tub, the price is, on average, $1,133,650. Noticeably, this is still $160,000 less than a home with a pool between 2800 – 3000 square feet. Next, to take the price of the home with the cost of adding a pool, we complete the following calculation: add to the price of the house $35,000 (average pool installation price) + .166* the average yearly estimated rent. The .166 comes from the fact that to install a pool, one needs about two months during which people would not rent the home. Observantly, the rent lost would add to the opportunity cost of building a pool. 

Using the above equation, we can determine that a pool’s cost for a home is, on average, about $52,944. Thus, for a 2800 – 3000 square foot home, we can conclude that one would save on average around $100,000 by building a pool instead of buying a home with a pool already installed.

Adding a pool, however, does not always save so much money. For example, for homes between 2200 – 2400 square feet, we find that building a pool is only $4273 cheaper. Such a finding can easily be assumed to be insignificant, and hence, it is unclear which option is more affordable for the square foot bracket.

Out of all the categories we tested, not one showed that building a pool would cause the cost of a house to become more expensive than a home with a pool already installed. That said, installing a pool could very well end up costing the same, and with the added personal effort needed to install a pool, one might be better off buying a home with a pool already installed. Also, as a reminder, please note that this study was very area-specific. The difference between building a pool at a newly purchased house or buying a home with a pool already installed will vary across regions.

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