Top 3 Ways to Waste Money on Home Improvements

If you've taken out a mortgage loan either to buy a house or to refinance, you may have added some extra capital to the loan amount for home improvements.  Working on your home, whether you've just purchased it or you've owned it as a primary residence for years, can return positive benefits for you, your family, and your finances.

But be careful.  There are some home improvement projects that will just drain your money.  Any project, if it goes over budget or takes too long or is left incomplete, can take up more money than it needs to.  But the following three projects are generally considered to be big money wasters when it comes to home improvement.

3. Adding a home office.  You may need one, but the person who buys your home after you probably won't.  Actually, the future owner will probably want to convert the office into a bedroom, which means he or she will see the office as a loss, as something that will require additional money.  Also, offices are notoriously expensive to put together.  You'll likely need to add an additional phone line, internet connections, and non-movable furniture such as cabinets.  A home office may actually reduce the overall value of your house.

2. Adding a garage.  Building a garage actually requires much of the same development work and structural work that building an entire house requires.  Roofing, foundation, and other similar elements—including plumbing if you want to incorporate a half bathroom—demand a great deal of time and labor.  Because garages are considered to be a standard element of a home, adding one won't increase your home value too significantly.  Not enough to make up for the investment of building the garage.

1. Adding a swimming pool.  This one may surprise you.  Truthfully, a swimming pool can and often does increase the resale value of your home.  But more often, potential buyers are turned off by the massive maintenance costs and potential risks that pools present.  Especially with the economy the way it is, potential buyers aren't as willing to pay for expensive luxuries like swimming pools.  And they are expensive.  Your home value won't increase enough to make up for the cost of adding a swimming pool.

Avoid these three home improvements unless they're completely necessary.  Financially, these three home improvements won't have positive results.