Turn Your Backyard Into Paradise

Creating an outdoor retreat can be a worthwhile but costly venture. So make sure your money is well spent on features that add the most value to your property.

Editor's note: This story has been updated since it originally was published in July 2006.

With existing-home sales at a ten-year low and the slump expected to continue this year, you have to make your house stand out if you want it to sell in this slow market. One way to do that is to improve your home's curb appeal and outdoor space.

Even if you're not trying to sell your home, you can increase its value by landscaping your lawn and creating a retreat that you, your family and friends can enjoy. Americans spend billions of dollars each year creating outdoor living spaces with comfortable furniture, built-in grills or complete kitchens, fireplaces, televisions, pools and spas.

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Is it worth it to spend as much money renovating a backyard as it costs to buy a small house? Depends on whom you ask. But if you're going to fork over the big bucks to revamp your yard -- or even if you're on a tight budget -- you should consider putting your dollars into features that add the most value to your property. Here's some advice from the pros:

Which features add value?

Jason Cupp, co-founder of design/build, landscape company Highland Outdoor, Olathe, Kan., says his clients frequently ask whether renovating their yards will add value to their property. If two similar neighboring houses were for sale and one had a great landscape design, that house would sell faster, he says.

However, he and other landscape designers agree that you probably won't get a return on your investment if your property is the only one in the neighborhood with the outdoor fireplace and kitchen, waterfall, custom-made pool and spa. That's why you should weigh your needs versus your desires when it comes to renovating your yard and deciding which features to add -- especially if you're on a tight budget. Even a little bit of money can go a long way if you prioritize and opt for features that are functional rather than purely aesthetic.

Quality landscape design and installation will add value to your property and help it sell faster, landscape pros agree. If you're on a tight budget, hire a landscape architect or designer to create a design then install the landscaping yourself -- over time, if you have to. "Some advice is better than none," says Jeff Carbo, an award-winning landscape architect in Alexandria, La. A landscape architect charges $85 to $135, on average, to create a design plan and could spend 12 to 18 hours creating that plan. A landscape designer typically charges $50 to $75 an hour. To find a designer or architect, talk with friends or family who have used one or check the American Society of Landscape Architect's FirmFinder and Association of Professional Landscape Designers' database of firms. Interview several pros, talk to their customers and check out their projects. The designer or architect should ask you lifestyle questions (Do you like to garden? Will you maintain the landscaping or will someone else?) so he or she can give you what you need.

Also, if you make a significant investment in landscape, Cupp says, "it won't look as good if you don't have a proper irrigation system, and your investment will erode." Again, if you're on a budget, install the irrigation system before the landscaping, Cupp says. You can find do-it-yourself kits for less than $200. Expect to pay at least $3,000 to $4,000 for a professionally installed system.

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Outdoor living rooms, in particular, have been a growing trend over the past ten years, especially since the September 11, 2001, terrorist attacks, Carbo says. In fact, designing and furnishing an outdoor room is the second most popular home remodeling project after remodeling kitchens, according to the Propane Education & Research Council.

Outdoor living rooms often include a fireplace or firepit, cooking station and comfortable furniture. But this is an important area to decide whether you're spending money on something that's functional and will add value to your property versus something that is purely a luxury item.

Covered patio -- adds value. "There's no reason to have a great outdoors without an area to sit and enjoy it," Cupp says. For a patio to add value, though, it's got to be more than a concrete slab. He says 95% of the patios he installs are paver patios (brick-like material made of concrete that comes in a variety of styles and colors). The price of materials and installation runs from $12 to $15 a square foot up to $40 to $50 a square foot. And Carbo says patios should be covered to provide shade or protection from rain. Otherwise, you'd be wasting your money if you created a space without a cover to protect you from the elements.

Fireplaces -- luxury item only. The outdoor fireplace -- as well as the firepit -- is a relatively new trend and is growing in popularity, says Carol Kaplan of the Hearth, Patio and Barbecue Association. Portable firepits are a cheap way to create a cozy outdoor setting. The actual built-in fireplace, though, can cost $8,000 to $35,000, is beautiful to look at but isn't that functional. Because of the maintenance involved, outdoor fireplaces usually are used just during parties or when guests visit. So you probably won't get a return on your investment with this pricey feature, landscapers say.

Kitchens -- add value. For anywhere from $15,000 to $100,000, you can have a refrigerator, grill and sink installed to cook and dine al fresco. Consider getting a professional involved to properly locate your outdoor kitchen so you can get the most out of it.

Television -- luxury item only. The cool factor is high here, but functionality is low because it's usually too bright during the day to watch outdoor TVs.

Swimming pools are one of those features that can be both functional and aesthetic and can add value -- or detract -- depending the type of pool and type of home buyer or owner. All of the landscape designers we talked to said for a pool to add value to property, it has to be custom-made -- not a prefabricated pool that can be found in any backyard. A basic customized concrete pool can cost $60,000 to $80,000. Throw in a hot tub and water feature, such as a waterfall, and you could spend well into the six digits. The problem is, landscape designers say, some home buyers want nothing to do with a pool and will steer clear of houses with one -- regardless of whether it is custom-made or prefabricated. So a pool actually could lower the value of your property in some people's eyes.

Water features, such as a pond or waterfall, also are somewhat questionable as to whether they add value. Cupp says water features are popular and have a high level of value. Costs can range from $1,000 for a small pool of water to $25,000 or more for a pond with a waterfall. Wendell agrees water features are popular but are expensive to maintain. He says they usually aren't worth the money you have to put into them because 50% are abandoned or ignored after the first four years.

Check out other tips from the pros.

Cameron Huddleston
Former Online Editor, Kiplinger.com

Award-winning journalist, speaker, family finance expert, and author of Mom and Dad, We Need to Talk.

Cameron Huddleston wrote the daily "Kip Tips" column for Kiplinger.com. She joined Kiplinger in 2001 after graduating from American University with an MA in economic journalism.