Should You Take Out a Loan to Improve Your Yard? What to Consider Before You Borrow.
Editor’s Note: This post was originally published in June 2019.
As summer approaches, it’s normal to look at your lawn and wonder if the grass could be greener. But who has the money to landscape their whole yard or even just spot-treat their lawn? After all, landscape upgrades can come with a high price tag.
If you don’t have the cash on hand, you might be tempted to borrow money for landscape improvements. However, you should consider a few details to determine if a lawn loan or landscaping loan is really worth the debt.
Is your landscaping project a need or a want?
Whether you’re looking at re-sodding, xeriscaping, or installing a water feature, greening up your yard will cost you plenty of green.
Before you apply for a loan, ask yourself if the project is necessary, and pinpoint the specific benefits. After all, lawn loans and landscaping loans are both considered personal loans, and the interest rates can run anywhere from 6% to 36% APR.
If you’re going to take on the debt, it’s crucial to ensure the work will add utility or measurable value to your property. For instance, if you have a toddler and your yard is unsuitable for play, adding the right kind of fencing can increase safety and increase the property value. On the other hand, if you install an above-ground pool, chances are it will lose value over time.
Will landscaping increase your property value?
High-quality landscaping can add value to your home. But not all projects will pay off. So before borrowing money, ask yourself: If you put your home on the market next year, would this landscaping be a selling point?
If the answer is “no,” then it’s not worth going into debt for. If the answer is a decisive “yes,” then you should weigh the options and consider moving forward. Here are some landscaping projects that generally increase property value when done properly:
- Upgraded patios and walkways
- Installing an irrigation system
- Planting bushes or shrubs in front of windows
- Planting trees and native plants
- Seasonal fertilizing and weed control
- Seasonal mulching and pruning
There’s also a chance that new landscaping can save you money down the line. For example, installing water-conserving features could save you money on irrigation. For projects that might save you money in the long term, estimate how much you’ll save each month and calculate how long it will take for the project to pay for itself. For multi-phase projects, you may want to borrow a smaller amount for the first phase, and then save up for the rest.
Regardless of the type of project, you also need to review your budget and determine how much you can afford to pay for a loan each month. Then, research how much it will cost to get quality work done. Sure, you can try to do it yourself, but DIY landscaping can actually lower the value of your home.
What loans are available for landscaping?
Most landscape loans are offered by credit unions, and credit unions are generally considered trustworthy lenders. But non-bank lenders also offer renovation loans at varying interest rates.
However, many non-bank lenders will charge an upfront fee in addition to interest.
It’s best to avoid taking on a high-interest loan (anything over 7%). If you can only qualify for loans with higher rates, you’re better off saving your money, while working to improve your credit scores. Then, once you’re in a better position, you can either pay for a landscape upgrade with cash or apply for a better loan.
Bottom line: Is a lawn loan a good idea?
Whether a lawn loan is worthwhile depends on a few factors. Before applying for a loan, ask yourself:
- Can afford a loan payment?
- Is the project necessary?
- Will the project increase your property value?
Borrowing money isn’t ideal. However, if taking out a loan will help you improve the safety of your property, or increase the resale value, it’s worth considering.
Bill Edwards is a landscaper and freelance writer who enjoys doing handyman projects around the house. He and his children recently built a neighborhood gazebo next to the community pool.
