Landscaping Your Investment: Thinking Outside the “Box”

by on June 19, 2012Jason Van Steenwyk

As we’ve established in previous editions of the Flippin’ Insider, the best improvements you can make, based on return on investment, tend to be cosmetic. What can you do to make the home better? Some common and cost-effective ideas thrown about include slapping a coat of paint on the exterior, painting or adding shutters, trim, fixing the gutters, swapping out the garage door, adding a nice mailbox out front – any of these can make a difference.

landscaping investmentBut take a second look. All these ideas involve the “box.” That is, the house itself.

Suppose you were thinking “outside the box.” What can you do with the property to increase its value from without? Well, we did some digging.

The American Society of Landscape Architects suggests homeowners invest about 10 percent of the value of the property in landscaping. And the Florida Growers and Nursery Association’s studies indicate some strong numbers indeed:

  • Landscaping can add up to 14 percent to the resale value of a property.
  • Landscaping can reduce the time a home stays on the market by as much as six weeks.
  • Landscaped patios can raise property values by as much as 12.6 percent.
  • A 5 percent investment in landscaping can raise the value of a home by 15 percent – a net 150 percent return on your investment.

Granted, you have to take these numbers with a grain of salt. Obviously both the ASLA and the Florida Growers and Nursery association have products and services to sell you. And whenever I see a statistic that says “as much as” rather than “an average of,” my reporter’s eyes start squinting.

But even if you cut the numbers in half, your investment in landscaping a flipped property can make a ton of sense. A beautiful garden or lawn is one of the first things a buyer will notice about a property, and it will draw them in.

What’s more, a nicely built and crafted deck, surrounded by well-chosen flora, is a powerful lifestyle selling point. Buyers like pretty shutters. But when they can see themselves enjoying the shaded deck, surrounded by beautiful shrubs and flowers – and the bird life they attract – it makes them want the home.

Other Data

We don’t need to take ASLA’s word for it. ASLA is able to point to a number of other sources that support an investment in landscaping from an ROI point of view.

And the 2011 HomeGain ROI survey found that an investment in landscaping generated an average return on investment of some 258 percent, in terms of the increase in value of the home. The same survey found that more than 9 out of 10 real estate agents surveyed recommended sellers invest in some good landscaping to prep their houses for sale.

The findings confirm a number of earlier studies that establish a range of increases in perceived home values as a result of professional landscaping. For example, a 2005 survey, published in the Journal of Environmental Horticulture, found that an investment in landscaping into unlandscaped properties increased property values from between 5.5 percent in Louisiana to 11.4 percent in South Carolina. However, very small landscapes didn’t seem to be effective. You have to go big. The study found that bigger plants and increasing sophistication of landscape design had a material positive effect on home prices.

Another study, also published in the Journal of Environmental Horticulture, conducted in Greenville, South Carolina demonstrated a significant positive effect as well: Improving a landscape from “average” (as defined by the study) to “good” increased home values by 10 to 12 percent.

So the data is about as clear and consistent as you can expect from a study measuring something as difficult to measure as comparative home prices. An investment in landscaping is a proven value-add (just about anywhere except perhaps Louisiana!).

Of course, some houses lend themselves more to landscaping than usual. You’ll also want to take the standards and norms of the neighborhood into account. You don’t want to overdo things, either. So much of real estate presentation is finding the right balance with the home and the neighborhood.

So How to go About It?

First, select a property that can really benefit from an investment in landscaping. If the property is already looking beautiful, that’s very nice. But it’s not much of an opportunity for you to add value as an investor. Look for an ugly duckling you can turn into a swan.

Second, keep one eye on the calendar. If it’s October and you’re in Wyoming, it’s going to be some months before your flowers are blooming. If flowerscapes are part of your strategy, look for these properties in late winter. Otherwise, you may need to adjust your strategy. Remember, as a house flipper, you don’t want to be making mortgage payments on the house for too long after you’ve finished your improvements.

Synchronize. If you dig up a lot of dirt, it can take a while before the grass grows back over it. Start your landscaping projects early in your renovation plan. It may be the first project you launch. Then concentrate on interior projects while your landscaping matures into a finished product and your plants settle in.

Use a licensed landscaping contractor. In many jurisdictions, landscapers must have a specific license. And landscape architects must be licensed as well. Using licensed, reputable contractors may be a bit more expensive than using fly-by-nighters. But it protects you in a lot of ways, between their liability insurance and workers compensation. They are also less likely to use illegal laborers. You don’t want to get caught using illegals on your investment properties.

Think about lighting. Daytime isn’t the only time a buyer might notice your house driving by. Nighttime lighting can be an important part of your landscape and home staging plan. What’s more, adequate lighting is an important security measure – and therefore a selling point for the home.

Pay attention to drainage. If you don’t ensure you have adequate drainage, or your land is draining toward your house, you have a problem!

Jason Van Steenwyk is a veteran financial industry journalist who has been fighting to make the world safe for the retail investor since 1999. He lives at Ground Zero of the real estate bubble in Fort Lauderdale, Florida.

{ 4 comments… read them below or add one }

Cane Jason February 11, 2014 at 11:10 am

That’s a great informative article on investment. Thanks.

Reply

Carl March 19, 2013 at 4:43 am

I think it all comes down to return on investment. If you have a large patch of land which needs to be landscaped but has additional problems such as irrigation etc then the costs could outweigh the ROI.

Still, landscaping is still one of the most cost-effective ways to add value to a property!

Cheers

Carl
Moss Landscapes

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Landscaping Cheshire March 13, 2013 at 9:29 am

Yea I agree with this article totally, people will be amazed how much value some good landscaping work can add to a property!

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Landscaping Liverpool August 23, 2012 at 1:55 pm

I found this article whilst looking for other information on landscaping however I have to agree with the author, if you want to improve the value of a property, landscaping is certainly one of the most cost efficient ways to do so!

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