5 Home Money Traps to Avoid Whether You Own or Rent

Whether you own your home or rent it, there are costs of living we all end up paying — loans, utility bills, furnishings, and more. While keeping up the home can be costly, it doesn't have to drain your wallet! Certain costs you may think you can't avoid you actually can, and should, according to "Shark Tank" investor Barbara Corcoran and consumer reporter Heather Herzog. Here are five money traps that any home owner or renter should never fall into.

Overpaying for Appliances

Whether it's a fridge or washing machine you need, there are several ways to pay less for them. Herzog says to avoid buying the latest model.

"You can always buy last year's model for less money. Trust me, you're going to be so happy about all the money that you're saving with this."

Another way to save on appliances? Buying a floor model. Better yet, buying a unit that's dented, Herzog says.

When it comes to brands, Herzog says, you definitely want to do your research on what's available from different companies.

"Different houses and different apartments have different types of spaces for your appliances. There's reasons why some of these great brands are so great. You want to do your research, create a short list, figure out what works for your space, and then go out and purchase," she says.

And what about those famous warranties?

"Warranties, in some cases, could potentially cost you more money. You want to make sure that you are working within your budget and you are spending on the warranties to make sure that you are covering the cost. It's a safety net. You want to create a safety net for yourself, but you also don't want to spend egregiously. Sometimes, these companies will up-sell you on warranties you may not need. Figure out what is best for your budget, what is best for your family, and then buy accordingly," Herzog advises.

Not Insulating Your Home Properly

After some research, Dr. Oz says not having proper insulation can cost you up to $200 a year. So whether it's sealing windows or vents or installing weather strips at the bottom of your doors, make sure your heat and A/C is not leaking out of your home.

Not Vetting Your Contractor

This may be the biggest money trap Corcoran says owners and renters fall into.

"The single best way I have found to judge a great contract is get up off the couch, go look at his truck. If a contractor has an organized truck, he's going to run your job as best he possibly can, and probably deliver on time once in a while. But if he's a mess in the truck, you're actually having a preview of how the job is going on," Corcoran suggests.

Making Improvements That Won't Make You Money Later

This particular point became an issue during the pandemic. "Everybody had too much time to sit at home and think about what they didn't like about their house. Everybody became a Mr. Fix it," Corcoran says.

So what are three things Corcoran says you should add to or change about your home? Here's what won't pay off for you in the future.

1. Lighting: "Everyone loves a light house, but they want natural light. If you get beautiful chandeliers, it's just not going to pay off. If you improve the electrical, it's not going to pay off."

2. Exotic landscaping: "Nothing wrong with putting a new lawn. You'll get your money back every time, but people go overboard on the landscaping. The appraiser that comes in and appraises your house is not going to give you more money because you have exotic plants. Landscaping is just worth so many points."

3. Pools: "People love to spend money on swimming pools. The average price is $48,000 for a new ground pool. You'll never get the money back. Two out of three people will buy a house with a pool, buy it despite the pool, and fill the pool in. Not a good idea. ... Two out of three people won't like your pool after you've done it."

So be sure to research your contractor's work, and take a look at online reviews or or call references if necessary. And be sure to always get a second quote on the project for comparison.

Waiting for "The Price to Come Down"

"They're not going to come down," Corcoran says. "This is the most incredible market I've seen in 30 years. They're not going to come down. Money is going to get more expensive."

Corcoran advises that if you try to wait it out to save more, you're just going to end up spending more in other areas.

"The faster you act, the better you are," she says.

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