Is landscaping your yard worth the cost?
Posted on Friday July 09, 2021
Is landscaping your yard worth the cost?
What are your plans for summer vacation? Like many people, you may still be swimming in uncertainty. Or are you anxiously awaiting the installation of your pool? With pandemic travel still uncertain, many Canadians are turning to backyard renovations and landscaping again this year to ensure a great summer. But is it a worthwhile investment?
The market value of your property
If you listed your home for sale today, how much would it be worth? Many potential sellers are caught off guard by this question. To know if the work you plan to do on your property will increase or decrease its value, you must first have an idea of what that value is.
To come up with a ballpark figure, you need to understand the concept of market value. Essentially, it's the value of your property on the market, based on supply and demand. A home is compared to other similar properties to get the most likely price for its sale in a free and open market. This is not the same as the cost of buying or replacing it if you were to build it again.
Cost of purchase and maintenance
To estimate the increase in value to your property from backyard renovations or landscaping, you need to do another comparison with properties that have the same new features, such as a pool. Then you calculate how much of the cost you can absorb. Are you clear on what that cost is?
The cost of most construction materials rose sharply in the first half of 2021. Some materials, such as lumber, are now selling for up to three times what they did 18 months ago. With the increase in demand and the closure of some plants since the beginning of the pandemic, some materials are in short supply, making them hard to obtain. This is a factor to consider if you want to do any work this summer. Get several bids from contractors you’re considering hiring and compare their prices.
Beginning in 2022, you’ll have maintenance costs to cover in addition to the installation costs, such as pool cover repairs, filtration system maintenance, fencing, staining (for wood decks), pruning (for trees and shrubs), replacement parts, etc.
Here are your best options, profitability-wise
Are you torn between two or three different home improvements? How do you figure out which one will make the best investment?
Rule number 1: Consider the neighbourhood. You want to stand out without standing out too much. There's no point in installing a beautiful in-ground pool and an interlocking driveway if everything else on your street is made up of asphalt, gravel and above-ground pools. Buyers looking for interlocking driveways and in-ground pools are probably not looking in your area. The idea is to stay in the price range of the neighbourhood.
Questions to ask about the neighbourhood:
Rule number 2: Keep your spending in line with 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 not at all the same percentage of the total value.
Rule number 3: If you plan to sell in the short term, don't over-customize your renovations. Make modest improvements instead. That way, you'll limit any losses.
Suggestion: Inspire potential buyers with a turnkey home. If you're landscaping your yard, don't just do half the work. When a buyer sees that there's no work to be done, it has a positive impact on the price they're willing to pay. Neat landscaping in the front will make a good first impression, but remember that people usually spend their time out back.
The best and worst investments
A few years ago, the Appraisal Institute of Canada calculated the proportion of costs you were likely to recover as follows:
- New deck: 50–75%
- Landscaping: 25–50%
- Concrete paved driveway: 25–50%
- Fence: 25–50%
- Pool: 10–40%
Keep these figures in mind when you're trying to decide between two attractive features. Of course, they only give you a general idea. The actual amount will depend on the scope of the work, the type of property and the area in which it's located.
So why buy a pool or hot tub or improve your yard?
The return on investment for a pool, fence and pretty flower beds isn't that good. But what's your real reason for making improvements? Most of the time, we do it for the pleasure of living in an environment we like.
A young family that buys a house and plans to live in it for a long time will spend and work on it to enjoy it. From that perspective, installing a swimming pool—which quickly loses value—planting trees and building a deck can be very good choices. The kids will be able to cool off and have fun. And the whole family will be able to invite friends over and enjoy the yard.
There's nothing like feeling good about your home! If you're concerned about the impact of the work you're considering, consult an appraiser. To get financing for your exterior renovations, contact us.