Backyard Improvement Loans: How to Finance your Home Deck, Pool, Patio and Landscaping
From a patio, to a home deck, to a new pool or just some general backyard improvement, learn how to best fund your outdoor project.
Whether you’re in sunny, coastal California, or in the chilly Midwest, you’ve probably been spending a lot of time outdoors due to the COVID-19 pandemic. And the more time you’re spending outdoors with family and friends, the more it makes sense to use your outdoor space to its fullest potential.
Maybe that means finally installing that patio area. Or maybe it’s fixing your walkway, adding some greenery, or looking into an in-ground pool that the kids have been begging for. Regardless of what you’re planning, no time is better than the present.
So, what’s stopping you?
According to design experts - most people’s vision of their dream backyard doesn’t line up with their budget.
“What homeowners really desire may greatly exceed their budget,” says Lucy Middaugh, an exterior designer based in California.
“What I’ve found is that if somebody has $40,000, the renovation they want is $80,000. If someone has $80,000, what they want is $150,000.”
If you’ve never completed a major backyard project before, it’s really hard to tell how much things will cost, which is one of the many reasons why homeowners’ budgets don’t line up with their visions.
When your vision for your new front yard or backyard is way bigger than your budget, you have three options:
- Compromise on your plans
- Sacrifice quality
- Look into financing options
Obviously, we’d never recommend sacrificing quality to fit a project into your budget.
So, in this article, we’ll share how you could finance your backyard project with a RenoFi Loan - which could help you accomplish a $25,000-$500,000+ outdoor renovation.
The Best Backyard Improvement Loan: A RenoFi Loan
The best place to start with financing for your project, whether it be a deck, patio, pool, or landscaping - is a RenoFi Loan. Here’s How it Works.
A RenoFi Loan is a new type of home renovation loan that combines the best elements of a construction loan with a home equity loan, allowing you to borrow based on your home’s after renovation value - and up to $500k, depending on your location.
|RenoFi Loans||Standard Home Equity Loan||Construction Loan||Personal Loan||Cash||Cash-out Refinance||Fannie Mae Homestyle or 203k|
|Loan based on the after renovation value||Yes||No||Yes||No||No||No||Yes|
|Borrow up to 90% post reno CLTV||Yes||No||No||No||No||No||Yes|
|Requires inspections & draws||No||Yes||No||No||No||Yes|
A RenoFi Loan is a great alternative for homeowners who are considering a home equity loan or cash-out refinance to pay for an in-ground pool, outdoor kitchen, or patio area but don’t have enough equity to borrow as much as they’d like.
By borrowing based on your home’s after renovation value, you can increase your borrowing power by more than 11x.
The main things you need to know about RenoFi Loans are:
- Loan amounts from $25k to $500k
- Terms up to 20 years
- Ability to borrow up to 95% of the after renovation value
- Full loan amount available at closing
RenoFi Loans - An Alternative to ‘Home Improvement Loans’
Sometimes, what’s marketed as a home or backyard improvement loan might actually be a home renovation loan that allows homeowners to borrow based on the future value of their property.
But most often, there’s actually a greater likelihood that the loan you’re looking at is really just a generic personal loan or credit card that’s being marketed as a way to finance a renovation.
For sure, there are cases where they’re a decent option, such as when you only need to borrow a small amount of money over a short period of time.
But here are three reasons why RenoFi Loans are better than personal loans (home improvement loans) for most outdoor projects:
1. Lower interest rates - Personal loans are unsecured, and this means that they come with a much higher interest rate than secured loans (such as home equity loans) that use your property as collateral.
And we’re not just talking a little bit higher.You’ll usually end up paying a rate of somewhere between 8% and 15% on a personal loan, or even higher on a credit card. In comparison, a RenoFi Home Equity Loan has rates nearly as low as what you would get with a first mortgage.
2. Lower monthly payments - The repayment term on a personal loan will most likely be somewhere between three and five years. In comparison, a home renovation loan commonly offers a payback period of between 10 and 20 years. A shorter repayment term means higher monthly payments, with excessive late fees if you miss a payment.
3. More borrowing power - Renovations can be expensive, and it’s not uncommon to need to borrow $100,000 or more to undertake your full wishlist. But whilst there may appear to be options out there that will let you borrow this amount on a personal loan, the reality is that most only go up to $25,000 to $35,000.
In fact, very few borrowers will actually qualify for a personal loan that goes anywhere close to $100,000, with lending criteria based strictly on your income and credit score. This means that it’s unlikely that you’ll be able to borrow what you need to complete the renovations you want to carry out unless you finance your project in a different way. Now, on the other hand, RenoFi Loans range from $25,000 to $500,000 and give you the ability to borrow up to 95% of your property’s after renovation value.
4. Interest is tax-deductible - If you use a home equity loan to pay for your renovation (on the condition that it classifies as a substantial improvement; one that adds value, prolongs its useful life or adapts a home for a new use), then the interest paid on this is tax-deductible, so long as your loan amount doesn’t exceed $750,000 for married couples or $375,000 for a single borrower. But the interest paid on a personal loan is not tax-deductible (be sure to review with a tax professional).
If you’re still in the daydreaming phase of planning your backyard renovation project, it can be difficult to know how much everything will cost.
Since most homeowners struggle with this, we’ll also share cost estimates and ranges for popular backyard additions like patios, pools, decks and more - that way you can decide what’s best for you.
Whether you’re interested in a project that might qualify for a RenoFi Loan or not, it’s important to get a better idea of whether or not your outdoor renovation idea is within your budget.
Check out the backyard projects below.
Skip to a Project:
How Much Does Landscaping Cost?
One of the best and most beautiful ways to improve your outdoor space is to invest in landscaping, in your front, side or backyard. This can include planting, lawn maintenance, mulching, lighting, walkways, and even more.
While many people might envision beautiful landscaping in their own backyard - one of the hardest and most important parts is designing your landscaping vision.
If you’re not a botany expert, don’t worry! One of the best ways to start is to use a landscaping design service to draw up a design plan for your backyard. Services like these are low-cost, and save you the time and effort of creating your own designs for your backyard.
This planning element can also save you time and money in the long run, by making sure you don’t install any landscaping you’re not prepared to maintain.
We recommend Tilly Design - an online service that you can use anywhere in the U.S.
However, it’s still important to get additional cost estimates for each aspect of your landscaping project from various experts after you get a design.
“When you pay for a plan, you should give it to different contractors and get adequate proposals,” says Lucy. “Talk to a pool person, a patio person, or a good hardscape designer as well. Landscape architects can be off with their estimates.”
While the cost of landscaping varies widely depending on your neighborhood and your exact project, landscaping installation (including softscape and hardscape) can range from $5,000 - $100,000 or more.
So, let’s break that down.
If you’re just focusing on greenery, ie. “softscape,” including new sodding, bushes, and plants, your cost should be on the lower end. Lucy estimates costs starting at $10,000 and averaging $15,000 to $20,000 depending on the yard.
However, if you’re remodeling your existing yard, costs will start at $5,000 for minor updates. The majority of that cost? Sprinklers and drainage.
If you’re moving around concrete, changing up the entire design, and your yard generally needs a lot of love - it’s not hard to end up in the $20,000-$30,000 range.
RenoFi Loans range from $25,000 to $500,000+, so they’re a great option to finance larger landscaping projects.
For smaller renovation projects (Under $25,000), there are lots of other options to explore. Check out our How To Pay For Home Renovations guide to learn more.
Landscaping Loans - Exploring your options
When you’re looking for the best way to finance your outdoor project, you might see landscaping loans listed as a perfect option.
But most often, just like with ‘home improvement loans,’ the loan you’re looking at is probably just a personal loan or credit card that’s being marketed as a landscaping loan.
There are three main loan options available to fund your larger landscaping project: RenoFi Loans, Traditional Home Equity Loans, and Landscaping Loans (Personal Loans).
Check out this comparison table to see the pros and cons of each option.
|RenoFi Loan or RenoFi HELOC||Home Equity Loan or HELOC||Landscaping Loan (Personal Loan)|
|Pros||Most borrowing power, no need to refinance, low interest rates, long terms||Lower interest rates, long terms||Quick application process|
|Cons||Not meant for projects less than $25,000||Less (or no) borrowing power if you don’t have much equity in your home||High interest rates, shorter payback period, much less borrowing power|
As you can see, RenoFi Loans offer big benefits for most people - especially for larger projects like in-ground pools, which we’ll get into below.
Not sure how to finance your landscaping project?
Speak to a RenoFi Advisor today to talk through your options.
How Much Does it Cost to Put in an In-ground Pool?
If you’ve been researching the cost of pool installation this year - you’re not alone! The main United States Pool and Hot Tub Trade Group estimates that more and more people are looking to upgrade their backyard with swimming pools and hot tubs. It’s a great alternative to the worry that comes with social distancing at local public pools or vacation destinations.
However, installing an in-ground pool isn’t cheap. In fact, it’s the most expensive part of backyard landscaping. The minimum cost of an in-ground pool is $45,000-$50,000, not including basic maintenance costs.
There are a lot of different variables that contribute to the cost of a pool, according to installation expert Dominic Dicesare of Blue Haven Pools. Two additional costs to consider are topographic surveys or stormwater management, depending on the condition of your backyard and where you live. Accounting for these things can add anywhere from $2,000 to $10,000 to your total cost.
Spas can add between $8,000 and $12,000 to the total cost - and then there’s waterfalls, additional lights, higher quality materials, and more.
If you’re scratching your head at where to start with outdoor projects - check out a service like Tilly Design - a professional online landscaping service - with full project plans starting at just $375.
For example, with basic concrete pool decking and different types of fencing - costs can vary wildly based on materials.
Homeowners’ cost estimates for pool installations are way off - and TV contributes to that.
“Most homeowners are $10,000 to $20,000 off in their cost estimate because they don’t know what these things are. People watch these shows on TV. The pools they are seeing on TV are half a million dollar projects. They aren’t seeing a basic backyard pool going in. They’re seeing furniture and all this other stuff - and they’re not factoring in that cost,” says Dominic.
“Make sure you do your homework,” says Dominic. “Get a couple of estimates.”
Despite these high costs, pool and hot tub installations are only rising in popularity, especially during the COVID-19 pandemic.
How Much Does it Cost to Build a Deck?
One of the most popular ways to upgrade your backyard is a new deck.
As outdoor spaces have become the safest areas for family and friends to gather, people are sprucing up their backyards with new seating areas, outdoor heaters, and other features that allow people to socialize in a distant way.
According to Remodeling Magazine, outdoor decks are one of the top ROI (return-on-investment) renovation projects. Outdoor decks increase curb appeal, and provide a great place to eat, drink and socialize with friends and family outdoors.
While the ROI on installing an outdoor deck is quite good, the initial investment required is significant.
The average cost of installing an outdoor deck can range from $5,000 to $50,000, depending on how large your deck is and what materials you use.
Wood and Trex decking starts closer to $5,000 for something simple, but can go up to $20,000, $30,000, or $40,000 for something multi-level with elevation, benches, steps, etc.
Stone, tile or paver decking/patio starts higher at around $10,000 for something quite small, but averages $20,000-$30,000.
However, additions like deck furniture, stairs, a roof-like covering, and other features that make the area more livable and enjoyable add onto the price.
To break it down:
- Deck furniture: $500-$4,000
- Stairs: $15-$25 per sq. ft
- Roof: $3,000-$10,000
- Enclosure: $8,000-$25,000
While a personal loan or a credit card might be great for a small project (around $5,000), interest rates in the 8-15% range are really going to add up for a larger project - which is why many people use RenoFi Loans for projects more than $25,000.
How Much Does it Cost to Install a Patio?
One of the best ways to turn your backyard into a place that people actually want to be in is by installing a patio. Read more about how homeowners have used RenoFi Loans to fund their patio renovation projects.
Whether you’re in a cold or a warm climate, patios with heating and firepits can provide outdoor space to socialize no matter what time of year it is.
While the cost of installing a concrete patio ranges from $5,000 - $35,000, it’s the patio add-ons that can really make the space count. Materials can drive up the cost as well - with concrete being the cheapest and fancier tiling being more expensive. Draining and mow strip can also drive up the price.
Basic concrete is ~$8 per sq ft. Paver is $20-30 per sq ft. Stone is $30-$50 per sq ft, including installation.
Any kind of stone decking or tiled patios will average within the $30,000 to $50,000 range, says Lucy.
Depending on your budget, you can turn your simple patio into a prime social spot. To get started on designing your dream patio design, check out an online landscape design service, and bring your outdoor vision to life.
Trendy add-ons for patios include:
- Lighting systems: $2,000-$5,000
- Heated walkways: $2,500-$5,000+
- Seating: $500-$4,000
- Sound systems: $100-$500
While many people can pay for smaller projects with cash or using savings, the average household in the U.S. only has $8,863 in savings - nowhere near enough to fund larger projects.
And why drain your savings when you could put it toward more important things - and use a RenoFi Loan for your outdoor project?
Take a look here at how much you could borrow with a RenoFi Loan for your outdoor project.
How Much Do Outdoor Kitchens Cost?
Outdoor kitchens are a popular choice for homeowners in warmer climates. Outdoor kitchens can range from simple grill set-ups to cabinetry, enclosures and even pizza ovens. (Yum!)
If you’re looking at just a grill set-up, an island area and some cabinetry, your estimate will start at around $10,000, but average around $15,000-$20,000, according to exterior design expert Lucy Middaugh. It’s not hard to spend $30,000 to $40,000 on a luxury island.
Don’t wait 10 years to save up the cash, or compromise on your ideal outdoor project, when RenoFi Loans exist.
-Installation estimate credit to Homeadvisor.com-
-In partnership with Tilly Landscaping Design-