All Home Improvements
Are Not Created Equal

Let's face it. It's easy to get swept up in the home-improvement craze. Your neighbors are remodeling their kitchen. Your sister-in-law is adding a bath. And your co-worker is finishing his basement.

Housing values are going up, but your stock portfolio has gone down. Now you're thinking about investing more money in your home. After all, a home is a sound investment and any home improvement is a good one. Right?

Wrong. While prices have headed north on a steady basis, not all home improvements are created equal.

Five Home Improvements That Don’t Always Add Value to Your Home

You can't contemplate each home improvement in a vacuum. For example, a family room is generally a good investment, but you have to consider what other features of your home are affecting its overall value.

If your house has only one bathroom -- and all the other houses in your neighborhood have 2 ½ -- do you really think you’ll recoup more than 75% of your investment in a new family room? You'd be much better off spending the money on adding a new bathroom. Chances are excellent you’ll get a 95% return on that investment.

There are several home improvements that can go either way. You can't necessarily count on them to recoup a good return on your investment. But then again, you can’t rule them out. They are:

1. Adding several feet to one side of your home.

2. Adding a pool.

3. Adding high-end accessories to an average home.

4. Adding central air conditioning.

5. Adding new windows.

1. Adding several feet to one side of your home. On the surface, this project seems to make sense. Let's say your living room is just 11 feet wide and expanding it to 14 feet will square off the room and provide you with much more usable floor space. At the same time, you also might decide that you'll bump out the dining room so that you can get around the table without having to turn sideways.

The problem with this type of addition is that its cost per square foot is likely to be extremely high. Remodeling typically costs 50% more than new construction. Every time contractors have to tie new construction into your existing home, the project gets trickier, takes more time to complete, and your costs tend to rise rather dramatically.

You can save yourself a headache by simply adding another room or two rather than a little extra space to all the rooms. You might find that the cost per square foot is lower this way and that you'll get more usable space.

2. Adding a pool. Unless you live in an area of the country where pools are commonplace, don't add a pool to your home expecting a high rate of return. That's because adding pools -- especially in-ground pools -- often reduces the number of people who will consider buying your home. People who don't like pools think of two things when they see one: maintenance and liability.

There is no doubt that having a pool requires a substantial investment of your time to maintain it. Plus, a potential homebuyer can envision taking down an above-ground pool and regrading the yard, but instinctively recognizes that removing an in-ground pool is much more challenging and costly. And he or she doesn't even want to think about the potential for a lawsuit.

3. Adding high-end accessories to an average home. Most people view home as their refuge, their place to relax and get away from it all. It is important to make your home comfortable for you and your family. But at the same time, you need a good idea of how your home might be viewed one day by potential buyers.

If you want to add some of the following high-end accessories to your home because you really want them, that's fine. Just don't expect much of a return from your investment should you decide to sell. Be wary of adding:

• High-end built-in appliances. The popularity of cooking shows on television certainly hasn't hurt those remodelers who focus on kitchens. But you have to match the quality of appliances to the quality of the room, the house, and neighborhood. Although high-end features might be desirable to potential homebuyers, you will only get a fraction of your original purchase price at resale if a Miele dishwasher or a $6,000 commercial-grade stove doesn't fit the house or the neighborhood.
• Exotic, hand-painted tile. Although you might love the design, potential homebuyers might not. And they might be intimidated by the thought of tackling a tile-removal project so soon after buying a new house.

• Central vacuum. This is another high-end accessory that might not give you much bang for your remodeling buck. It can be costly to add the piping throughout your home. In addition, with most folks' hectic lifestyles, many people would rather spend that money on a cleaning service and let the professionals worry about schlepping the vacuum up and down the stairs.

4. Adding central air conditioning. If adding central air conditioning comes at the expense of premium closet space, you might do more harm than good to the value of your home. Many older homes are built with limited closet space. Taking up valuable space to add central air can cause new storage problems. If you're thinking of adding central air, make sure you talk with contractors who understand how to cool your home without taking away closet space.

5. Adding new windows. Unless your present windows are literally falling out or won't operate, replacement windows won't recoup the significant investment made in buying new tilt-in, high-efficiency windows. An average-sized, high-efficiency double-hung window can easily cost you $200 (high-end models can cost 50% more) and installation per window can be about the same. Add up all the windows in your house and you will see the kind of hit you'll take in the pocketbook. For instance, if you have 10 windows on one floor, that's $2,000 in windows alone.

Cheap replacement windows can save you money in the short run. However, cheap replacement windows often have wide sashes that cut down on the amount of glass, thus darkening your home. Real-estate pros will tell you that bright, cheery homes outsell dark, somber ones every time.

-- Ms. Lankarge is a consumer-issues writer in West Hartford, Conn. Mr. Nahorny is a journalist and weekend home-improvement warrior in Newington, Conn. They are authors of "How to Increase the Value of Your Home" (McGraw-Hill, 2005), from which this article was excerpted.

Email your comments to rjeditor@dowjones.com.