Optimizing Your Landscaping Budget for Maximum ROI on Your Real Estate Investment

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To effectively decide how much to spend on landscaping for your fix-and-flip investment property, keep in mind that a negative first impression can prevent buyers from considering your property as their future home. Potential buyers need to be able to imagine themselves coming home every day to your flipped house, so it's critical that your property has great curb appeal—enticing potential buyers to see what's inside.

Along with investing in interior amenities and upgrades, experienced fix-and-flip investors will also pay close attention to what buyers are looking for on the outside of the property. In fact, before even deciding whether to purchase a fix-and-flip investment property, the first thing a seasoned house flipper will do is determine what the renovated property will be worth by comparing it to at least three similar "comp" properties nearby that have recently sold. This comparison of properties should include an exterior analysis as well.

When you are putting your landscaping budget together, refer to your comps for guidance on what will make the exterior of your flipped home competitive with other homes. Are local buyers looking for expansive lawns, or are drought-tolerant plants attracting more sales? Do other homes on the block have immaculately manicured shrubs and well-trimmed trees? If so, the shrubs and trees on your renovated property should look pristine.

Is there a minimum amount I should spend on landscaping my fix-and-flip investment property?

Real estate studies have shown that if you upgrade your landscape from "poor" to "good" you can expect an estimated increase in the value of your home of 5-15 percent. What constitutes a "good" landscape is subjective, which is why comparing your property to recently sold homes is helpful, because it gives you a basic idea of what local buyers were attracted to when selecting the home they bought.

As a general rule, you can expect to spend 5-10 percent of your fix-and-flip property's ARV (after-repair value) on landscaping. The good news is, you can expect to get all of that back immediately in increased value. For a $200,000 home, that would mean a $10,000-$20,000 landscape upgrade; for a $500,000 home, it would be $25,000-$50,000.

Generally speaking, higher end homes increase the most in value from a well-designed, well-funded and well-installed landscape. Hardscape features such as patios, decks, stone walls, and driveways can be an expensive part of your landscape investment, but with higher end homes, these may be unavoidable expenditures if you expect to get top dollar for your renovated fix-and-flip property.

What if I don't have a big budget for landscaping?

Depending on the market your fix-and-flip property is located in, and how it compares to local comps, you may (or may not) need to install new sod and invest in new shrubs and plants. If your profit margin is tight and you don't have the budget for a more drastic yard makeover, making simple cosmetic fixes to the exterior of your property can make a big impact. Some suggestions for things that will give you more bang for your buck:

Other important fix-and-flip landscaping tips to keep in mind

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