Posted on Friday July 09, 2021

Is landscaping your yard worth the cost?

What are your summer vacation plans? Like many people, maybe you are thinking about improvements and landscaping so you can spend quality family time outdoors. But is that a high-return investment if you want to sell in the future? 

The market value of your property

If you put your house up for sale today, how much would it be worth? That question catches many potential sellers off guard. To gauge the impact of landscaping on your home’s value, first find out what that value is. 

And that involves understanding the concept of market value, which is essentially what your home is worth on the market, based on supply and demand. It is determined by comparing your house to other similar properties to obtain the price your home is most likely to sell for in an open and competitive market. It is not the same as the purchase price or replacement cost if you had to rebuild. 

Purchase price and maintenance

To estimate the increase in the value of your property after the work is done, you should compare it to other properties with the same new features, such as a pool. Then, calculate the proportion of the cost that you can absorb. Do you know how much the work you have in mind will cost? 

In recent years, the price of most materials has risen sharply. Certain things, such as lumber, cost up to three times more than in 2020. That is worth keeping in mind if you want to do the work this summer. Get multiple quotes from contractors you are thinking of hiring and compare prices. 

Remember to think about maintenance costs too, such as repairs to your pool cover, filtration system maintenance, fencing, deck wood staining, tree trimming, replacement of certain components, and so on. 

Here are your best options, profitability-wise

Trying to decide between two or three options for your yard? How do you know which gives the best bang for your buck? 

Rule number 1: Consider the neighbourhood. You want to stand out, not be the odd one out. No need to install a beautiful in-ground stone pool and paving stones if asphalt, gravel and above-ground pools are the norm on your street. Buyers who want paving stones and an in-ground pool are probably not going to look in your area. The idea is to stay within the price range for where you live.

Rule number 2: Keep the cost reasonable in relation to the overall value of the property. A $50,000 job on a $150,000 property is very different from the same job on a $500,000 home. The investment is nowhere near the same percentage of the value. 

Rule number 3: If you plan to sell soon, do not invest heavily in custom renovations. Instead, opt for more modest improvements. That approach will limit your losses. 

Suggestion: Give buyers what they really want—a “turnkey” option. If you are going to do landscaping, do the whole thing, not just half. When a buyer realizes that nothing else needs to be done, they will be ready to pay more for your house. Attractive landscaping in the front will give a good first impression, but remember, where people spend time is usually in the back. 

The best and worst investments

A few years ago, the Appraisal Institute of Canada calculated the proportion of costs that a homeowner could expect to recoup: 

• New deck: 50–75%
• Landscaping: 25–50%
• Concrete paved driveway: 25–50%
• Fence: 25–50%
• Pool: 10–40%

Keep these numbers in mind to help you decide between two potential projects. The figures are only a general guide, and the actual amount will depend on the scope of the work, the type of property and the area where you live. 

So why buy a pool or hot tub or improve your yard?

The return on investment for a pool, a fence and a nice lawn is not all that attractive. So what is the real motivation for those kinds of improvements? Most of the time, people do it for the pleasure of being happy where they live. 

When a young family buys a forever home, they put money into it and make improvements that will make them happy. With that in mind, installing a pool (which quickly loses its value), planting trees and adding a patio can be very good choices. Children will be able to cool off and have fun. Young and old alike will be able to invite friends over to enjoy spending time outside. 

There is nothing like feeling good about your home! If you are concerned about the impact of the work you have in mind, contact an appraiser. To obtain financing for your exterior improvements, contact us.