Does Landscape Add Value to the Property?

15 Mar Does Landscape Add Value to the Property?

As an appraiser, I often get asked various questions about what contributes to value. One common question that seemingly comes up is the issue of landscape and how much value it adds. The honestly truth is there is not an easy answer. Every market, neighborhood (tract, acreage, etc) may have a different market reaction. But let’s take a look at some various factors involving landscape.

1) Issue of landscape curb appeal vs. contributing value

Often times when a house is listed on the market, it’s recommended to spruce up the landscape. This can very positive to enhance curb appeal by spending hundreds if not a few thousands of dollars to replant flowers, add bark, enhance lawn, etc.  Does it mean it will add “X” amount of dollars to the appraisal value? No. But does it provide possible “appeal” to a buyer who is considering making an offer? Yes. So in a sense it does potentially pay for itself as may help entice a potentially buyer to make an offer on the home but not typically in a line adjustment on an appraisal.

2) Understand your neighborhood and be cautious to not over improve your landscape if concerned about the market return

It can be ill-prudent to think that by spending for example $20,000 in landscape (or whatever costs) for landscape improvement(s) that it will increase the value of the property by the same dollar amount. Often times, we do not get the full return on our investment.

Example, if the location is a tract subdivision with the majority of properties with standard landscape and you decide to spend in exorbitant amount of money on landscape (i.e. built-in kitchen/ BBQ, upgraded patio arbor, water feature, fire pit, pond, garden, etc), you likely won’t get near the return on your improvement costs increasing the overall value of your home.  This is partially due to the fact that comps are still the comps in the neighborhood and without market support with comps with similar landscape, a typical buyer is likely not going to pay a dollar for dollar premium above the comps nor would an appraisal justify that. Now would a typical buyer pay some premium above? Likely yes. How much more? The amount will vary.

3) What about acreage properties?

In my market area, I appraise acreage properties with varying landscape features. Acreage properties can have a wide range of landscape variances from having little to no landscape such as gravel driveways, no fence, natural terrain to estate type properties with manicured grounds w/ paved/concrete driveway, patio/decks, perimeter/cross fencing, gardens, sprinkler systems/irrigation water, outdoor BBQ/kitchens, etc.

Item #2 still applies in considering the lack of dollar to dollar return. However, from my experience, acreage properties with various landscape features noted above, there is generally a positive market reaction (assuming all other features equal) and often times the comparables will trend higher in price. Due to this, it’s important to find comparables with similar features/landscape to show this market support.

Summarizing, while each market has its own standards and expectations, landscape can be an important aspect of a home. It’s important to spend money on landscape improvements for one’s own enjoyment and use. Then, any market return and dollar return expectation is then just a bonus.

Disclaimer: All information deemed reliable but not guaranteed. The information is meant entirely for educational purposes and casual reading only and is NOT intended for any other use.  This information is NOT intended to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or other potential real estate or non real estate purpose. This appraiser is NOT a qualified home inspector and any tips are for informative purposes only. If you’d like to obtain and order an appraisal for your specific needs, please contact Bryan at 530-878-1688 for more information.