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How to create — and fund — your own backyard oasis

Many homeowners are investing in outdoor projects. Which upgrades could make the most sense for you, and what might be the best way to pay for them?


AMERICANS HAVE BEEN POURING MONEY into renovating their homes — and they’re not stopping at the front door. They’re reinventing their outdoor spaces, too, screening in porches, bumping out decks, installing tennis courts and undertaking total landscaping makeovers to be able to make the most of the time they spend at home.


What’s more, they consider it money well spent: When homeowners were asked in a recent survey to rate how much joy outdoor projects had brought them on a scale of 1 to 10, pools, patios, landscape lighting and outdoor kitchens received 9s and 10s.1


Wade Coffey headshot
“Outdoor improvements like well-maintained lawns and landscaping increase curb appeal of a property and enhance its marketability.”

— Wade Coffey, senior vice president and chief appraiser, Consumer and Small Credit Business Risk, Bank of America

“Despite the rising costs of outdoor projects, lately it has been hard for homeowners to go wrong financially by investing in them,” says Amanda Pendleton, home trends expert for real estate website Zillow. “Our latest research finds that certain outdoor features are associated with homes selling faster than expected, and for more money than expected when mentioned in a listing description,” she says.


Wade Coffey, senior vice president and chief appraiser, Consumer and Small Credit Business Risk, Bank of America, agrees, adding that “outdoor improvements like well-maintained lawns and landscaping increase curb appeal of a property and enhance its marketability.”


Which outdoor upgrades provide the most value?

Contractors note that some projects — like adding a fire pit or building a pizza oven — are relatively inexpensive, while others — such as a major landscaping job or a pool with furniture, fencing and the works — can easily run tens of thousands of dollars. Some upgrades provide a greater return on investment than others. For the estimated cost of some popular improvements, and a rough guide to the impact they might have on your home’s value, see the slideshow below.

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Given the current economic climate, Merrill Wealth Advisor Lisa Kent suggests approaching any five-figure home upgrade with caution. “More often than not, I’m seeing clients pausing big projects,” she says. In fact, after years of steady increases through 2022, overall spending on home remodeling fell in 2023 and is expected to continue to decline in 2024 due to high interest rates and — a soft real estate market.2


Still, says Kent, “I'm a big believer in being grateful for what you have and looking for ways to enhance your quality of life.” The key is to have a plan for how you’ll pay for the project without sidetracking your other financial goals, such as saving for retirement or a child’s college education. “You need to be thoughtful about these decisions,” she adds. Your advisor can help you think through the costs and potential tradeoffs, as well as ways you can consider funding the project.


Are you investing in your home’s value or your own pleasure?

The first thing you need to ask yourself is whether the project is primarily for future buyers or for you. If your objective is personal enjoyment, follow up with a few practical questions before you commit: Given your area’s climate, for how much of the year will the improvements extend your living area to the outdoors? Do you plan to stay in your current home long enough to justify the expense?


Also consider the cost and time commitment of regular maintenance. Will you clean the pool and weed your new landscaping yourself? Or will you pay others to do it?


Upgrades new owners will appreciate, too

If you’re renovating with the thought of ultimately making your home more attractive to potential buyers, begin with good maintenance of your lawn, plants and shrubs, says Coffey. “Outdoor living spaces with sitting areas, cooking appliances and firepits provide an extension of your overall property,” he adds. “Including lighting can enhance the ambiance, which will be attractive to the market.”  


Also, be aware that not all outdoor upgrades have the same potential to lift your asking price when the time comes to sell. For example, an outdoor fireplace adds little to nothing to a home’s value, according to Zillow. Saltwater swimming pools also have high installation and maintenance costs, but only raise a home’s expected sale price by 1.5%, per Zillow’s 2024 research. In addition, Pendleton says, “Pools are highly personalized features that not every buyer will appreciate. In certain climates, like Arizona, a pool is considered standard, but in states like Washington a pool could be viewed as a costly nuisance.”

Options for financing the project

The next big choice is deciding which of the many available ways of funding is appropriate for your situation. Typically, if you have built up a sizable amount of equity in your home, you might consider a home equity line of credit (HELOC) to cover the costs, but sharply higher interest rates have made borrowing far more expensive. In 2022, more than four out of five homeowners who renovated tapped their savings, according to Houzz’s most recent renovation survey.3


Kent suggests boosting your cash reserves from six to 12 months’ worth of spending to 18 months or more to guard against cost overruns coming just as you experience a financial setback. “You should have absolute risk-free, liquid cash that’s hopefully earning something in case you lose your job or experience a catastrophe at the same time your pool is going in,” Kent says. An advisor can help you look at the particulars of your situation.


Another option: Instead of selling investments, which may trigger a tax bill, you may want to consider a Loan Management Account® (LMA®), offered by Bank of America. It’s a line of credit pledged against your investment portfolio that can allow your investments the potential to keep growing and prevent the need to pay capital gains taxes. Your advisor can help you understand the potential risks involved in opening an LMA®.


Whatever changes you decide to make, and however you decide to finance them, “ultimately, with anything outdoors, it’s really about upping the joy factor,” says Kent. She recalls clients who disliked their vacation home’s run-down back porch and yard but were reluctant to spend any of their savings to spruce it up until Kent convinced them they could afford to do it without disrupting their retirement plans. “Every July Fourth for years afterward the wife called me to say, ‘I think of you when the entire family gathers in our back yard,’” Kent says. “They’ve had all those years of pleasure.”

1 National Association of Realtors, “2023 Remodeling Impact Report: Outdoor Features,” March 2023.

2 Joint Center for Housing Studies of Harvard University, “Continued Easing of Remodeling Declines Expected into 2025,” April 2024.

3 Houzz, “2023 U.S. Houzz & Home Study: Renovation Trends,” March 2023.


Bank of America, Merrill, their affiliates, and advisors do not provide legal, tax, or accounting advice. Clients should consult their legal and/or tax advisors before making any financial decisions.


The Loan Management Account® (LMA® account) is a demand line of credit provided by Bank of America, N.A., Member FDIC. Equal Opportunity Lender. The LMA account requires a brokerage account at Merrill Lynch, Pierce, Fenner & Smith Incorporated and sufficient eligible collateral to support a minimum credit facility size of $100,000. All securities are subject to credit approval and Bank of America, N.A. may change its collateral maintenance requirements at any time. Securities-based financing involves special risks and is not for everyone. When considering a securities-based loan, consideration should be given to individual requirements, portfolio composition and risk tolerance, as well as capital gains, portfolio performance expectations and investment time horizon. The securities or other assets in any collateral account may be sold to meet a collateral call without notice to the client, the client is not entitled to an extension of time on the collateral call, and the client is not entitled to choose which securities or other assets will be sold. The client can lose more funds than deposited in such collateral account. The LMA account is uncommitted and Bank of America, N.A. may demand full repayment at any time. A complete description of the loan terms can be found within the LMA agreement. Clients should consult their own independent tax and legal advisors. Some restrictions may apply to purpose loans, and not all managed accounts are eligible as collateral. All applications for LMA accounts are subject to approval by Bank of America, N.A. For fixed rate and term advances, principal payments made prior to the due date will be subject to a breakage fee.


Before taking out any mortgage or line of credit, borrowers should consult their tax advisor to understand the implications of each of their options.


Banking, mortgage and home equity products offered by Bank of America, N.A., and affiliated banks, Members FDIC and wholly owned subsidiaries of Bank of America Corporation.Home Icon for Equal Housing Lender Equal Housing Lender. Credit and collateral are subject to approval. Terms and conditions apply. This is not a commitment to lend. Programs, rates, terms and conditions are subject to change without notice.

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