The most common question homeowners that aren’t selling their home ask, is which renovations will add value to their home. My response is that while the full cost of a sizeable remodel is rarely recouped, often times specific projects that stay within the scale of the home, will add substantial value should they one day decide to sell. Likewise, they can detract from the value if you aren’t careful.

Whether you are considering an improvement to your kitchen, building a garage/outbuilding, creating an outdoor living space, or adding a second, third, or fourth bathroom, it makes good sense to consider resale value and appeal to future buyers– whether you are currently planning to sell one day or not.

Often, the renovations I just listed make great sense to both current homeowners and prospective buyers. Adding a bedroom, another bathroom - especially a master bathroom - is a win-win for both parties. In the case of these remodels what is most important to consider is staying within a budget that will fit in with your home’s total value potential.

Your home’s value will always be limited in part by your neighborhood. A $50,000 kitchen project in a neighborhood of $250,000 homes will not translate to your home being worth $300,000, so you’ll want to keep your cabinet, countertop, and fixture selections to a modest level.

Likewise, if your home is in a neighborhood of $500,000 homes, you can’t skimp on your remodels. Future buyers in this price range will expect high-end cabinetry, appliances and countertops. Without them your home will certainly lose value.

In rare cases (that sadly I have seen firsthand) a renovation that may make perfect sense to you and your family, like building an indoor basketball court in the backyard that you, and your family of ballers will use daily, could one day render your home “unsellable” because buyers have no use for the structure that absorbs half the backyard. It happens!

By all means – do to your home what makes you and your family happy. But, you’d be smart to also consider that perhaps one day down the road you will want your home to appeal to a broader audience.

To help you determine which remodeling projects offer the best bang for your buck, check out the 2008-2009 Cost vs. Value Report by REMODELING Magazine® which ranks projects by an estimated return on your investment specific to your geographic area. The top projects included siding replacement, deck additions, kitchen remodels, window replacement, and bathroom remodels.

Have a specific project you’re considering? I’d be happy to offer you an opinion, as well as examples of comparable homes in your area to help you decide. Just e-mail me at mcartier@realtyusa.com

To download the full report:

© 2008 Hanley Wood, LLC. Reproduced by permission. Complete regional and city data from the Remodeling 2008 Cost vs. Value Report can be downloaded for free at www.costvsvalue.com.