It's hard to get a sense of the slope, which is really important. I'd want a stepped back yard with retaining walls, much wider (and hopefully shallower) stairs. I'd make these areas into zones. A sitting zone, a BBQ zone, etc. Whatever you want to have.

I'd want more connection to the water. I presume you have a dock? Where is it? Unless you love the gazebo's location, I'd move it to a lot closer to the water, which would probably free up some views from your house.

It looks like you might have a hot tub?

Do you like to garden? That makes a big difference, too.

Do you need storage for water toys? (Kayaks, SUPs, etc).

ShadyWillowFarm, haha, thank you, it is our primary residence! The gazebo is currently right in front of a window blocking the view of the lake so as much as we like the idea of having a gazebo this one will be removed. Which brings up the issue of how to maintain some privacy on the top deck with that gone. And we do still want to have a screened in area somewhere, thinking if we make a walkout basement we will have a patio covered by the deck above and can screen that in. Yes to a fire feature, or two. No drainage issues. Love where you're going with the rest of the suggestions, exactly the type of hang out spot we would love to have!

Sigrid, there is a decent slope, which is why we think excavating and creating a walkout basement would provide more functional space.

Totally agree about more connection to the water! The house came with a standard dock which is not installed in the photo. I think we can do something more interesting at the lakefront but I'm new to lake life so have do a little research to see what our options are. I don't love the harshness of the current sea wall, would love to "soften" that up.

You're exactly right about that gazebo, it's in front of a window, it will be removed. It has some mold issues so not sure it's worth keeping, but we did discuss moving it closer to the water. I wonder if the cost to do that would be more expensive than getting a new one!

What looks like a hot tub is actually a covered patio table. We aren't really interested in having a hot tub. But we do love to garden and are thinking about including a greenhouse not just for gardening but also to use as a tropical hangout spot in the cooler months.

We will need storage for water toys. We don't have any yet but plan to have at least kayaks and maybe a canoe to start. It's a good idea to think about that now!

I like all the suggestions and your ideas! Just want to add that I am a tad (okay, extremely) envious of your new place. Enjoy!

@cyn427 (z. 7, N. VA), thank you so much!

I kayak near the shore of a lake nearly daily in season. I'm sure I wouldn't see much of what's on your porch. I'm not convinced I could tell if you were standing naked without binoculars (which I might have and lift in your direction if a bald eagle landed in your trees (the lake I kayak on has a pair of bald eagles, but when they land in trees, it's rarely far from the shore)). Anyway, privacy is the opposite of lake views. Certainly, if you were lying naked to sunbathe, I couldn't tell from the lake. So, if you want shade, then you need a tree, but I suspect you have plenty of privacy. If you want to sunbathe nude, think about where and create privacy for that.

Sigrid, very interesting perspective! That is not why we are looking for privacy. The houses are kinda close to one another so with the gazebo removed and the deck redone, if us and our neighbors are outside at the same time it might feel like we are hanging out together. Which is ok sometimes for sure, but I'm sure they don't want to feel like we are staring at each other either. I was just thinking about including some sort of privacy screen or more trees on the side of the top deck, if we have room, to break our spaces up a bit. The previous owner had put a standard fence there but I think that feels kinda harsh and boxed in. Also not very pretty to look at for my neighbors. I'm sure there is a better solution. I definitely want to keep the view to the lake unobstructed and open.

Probably a columnar arborvitae is your best bet, unless you have deer. They apparently love arborvitae. I have the same problem. We have a witch hazel, hemlocks and birch between us and the neighbors, because it's shady, they are all pretty thin. We don't really see them that much, mostly because their deck is further from the lake than ours, which was grandfathered in as too close. However, we do hear them. They are LOUD!

If you find a solution for too close neighbors being loud on their deck, let me know!

I don't know how much space you have. The deer leave birch and striped maple alone and both seem to be okay in the shade of a side yard.