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When people think of water gardens, they tend to think of ponds, streams, and waterfalls that sprawl across a magnificent boulder-strewn watercourse, replete with koi fish hiding in the shallows beneath a bridge. The truth of the matter is you don't necessarily need a large space in order to install a water feature.
You may be thinking that your yard is too small or that installing a water feature would cause you to lose valuable space that might otherwise be used for plants, grass, or a couple of chairs. In actuality, even a small water garden can add a great deal of interest to your backyard without taking up much room. A small bog or pond fed by a pump-powered waterfall can appeal not only as a visual anesthetic, but it promises the relaxing sound of trickling water and the smell of water and lush plant life. Because a water feature appeals to so many senses, it can actually give the feeling of size and grandness. If you think about it, a water garden is a much more interesting experience than a patch of grass or a table and chair set.
Source: Water Features for Small Gardens