Not all home improvements are created equal. I have already written about which improvements you should avoid completely, as some renovations give you a much larger return on your investment (ROI) than others. If you are trying to decide between adding on an office or doing a full remodel of your outdated kitchen, you probably want to consider which one will be worth the most in the long run.
1) Kitchen: Whether large or small in scope, renovating your kitchen is always money well spent. In recent years the trend has moved away from formal living areas to the kitchen really being the focus of the home. Entertaining has become more casual and many people are not even bothering with formal dining and living rooms anymore. With that, there has become and increased focus on the kitchen not just being functional but also attractive and decorated.
Kitchen renovations can be as large as tearing everything out and replacing it all, to just replacing old appliances, from refacing cabinets to simply replacing cabinet hardware.
ROI at resale: 75-80% according to the 2008 annual survey by Remodeling Magazine
2) Bathrooms: Along with kitchens, this area of the home gives the largest return on your investment.
A mid-range bathroom remodel, one in which everything is replaced with comparable items and all plumbing lines remain where they are located, gives the largest return on your investment.
If you can't afford or don't want to do full upgrades, consider refacing the cabinets, changing out hardware for something more contemporary. Shiny brass and chrome are currently on the outdated list having been replaced in favor of satin nickel and oil rubbed bronze.
ROI at resale: 75% , according to the 2008 annual survey by Remodeling Magazine
3) Siding: This one surprised me since I personally have intense hatred for vinyl siding. But apparently the rest of America doesn't feel like I do. Replacing the siding on your home has the highest return on your investment of all the major remodeling projects. If the siding on your home is in need of repair, painting, and a lot of TLC, it may be wise to consider replacing it with either vinyl or fiber-backed cement.
ROI: 80% for vinyl. 87% for fiber cement according to the 2008 annual survey by Remodeling Magazine
4) Landscape: Remember that first impressions are often what sell a house. This doesn't mean that you have to invest tons of money to see a pay-off. You want to have a well-groomed front lawn. Even simple things like planting flowers near the front of the house and mulching the flower beds will make a huge difference on the percieved value of your home. When prospective buyers pull up to the front of your home they will assume that the care and attention given to the outside of the home reflects the level of care and attention given to the inside of the home.
5) Increase the outdoor living area. The rise in casual entertaining has made having an outdoor kitchen/living area a must-have for many areas of the country. The trend for moving the indoors out can be seen in all of the home magazines this season. Creating this outdoor living space does not have to be expensive. If you DIY a project of this type, you will get more return on your investment than you put in.
6) Paint is always in style. It is inexpensive and provides a large amount of bang for your buck. A simple change of color to your walls can make a huge difference in how the room feels. I have a fondness for Benjamin Moore paints and at their website they have a great program that allows you to "paint" your room different colors.