What you can do to improve the value of your home is not a one-size-fits-all answer. It really depends on who might be the best-suited potential buyer. As one example, let's say that, by today's definition, your home is best suited for a developer, thus being what one might refer to as a teardown. There would be no extra value added for any upgrades or improvements.

Let's suppose your home is in relatively good condition and simply needs a bit of freshening up. It is safe to say that you can never go wrong spending the money for a simple paint job, to replace a worn carpet or, if it is within your budget, to refinish hardwood floors. Tree trimming and basic landscaping will help yield a better sale return.

Now let's look at the more complicated scenarios. Example: Your home is a one-story in a location that warrants a much higher price for a large two-story. Does it make sense to add a second story? Or does it add tremendous value to totally redo the kitchen and the bathrooms? This is hard to say because there are so many other factors.

The more you commit to, the more risk you take. Here are things to consider:

1. Stress.

2. Your time.

3. construction delays.

4. Tying up your money.

5. Interest and loan costs.

6. Unforeseen problems with your contractor.

7. Changes in the market.

8. Supervision aspects and costs for project supervision.

The biggest concerns are changes in market conditions that are difficult to anticipate. Interest rates and economic conditions can quickly change market value. You also need to consider competing properties on the market and how long they are taking to sell. Since your home will command a much higher value after making major upgrades and improvements, will it be as sellable as a smaller home for a far lower price? Will there be plenty of buyers for the price range? Or will you have significantly limited the amount of buyers by making specific improvements and thus raising the price range?

Will your price be driven to one that competes with brand-new homes in the neighborhood? Remember that no matter how much you remodel, you still will not have a brand-new, never-lived-in home unless you build from scratch. Most older homes cannot be remodeled to offer volume 9- to 10-foot ceilings on the lower level, which is the current trend, for example.

You are always at risk guessing where the market will be and what the demand will be for your remodeled home. Many an owner have regretted making a big investment only to learn that the demand for what they had to offer was not there in the end. If the home still has small rooms and low ceilings, and lacks orientation to the yard and expansive, open space throughout, you will probably face buyer resistance. If the house is dark, or overly suggestive of a formal lifestyle, with an abundance of columns, marble, granite or small windows, your audience will be significantly smaller. It really depends, but everything matters, from curb appeal to backyard amenities to privacy.

Call an experienced and professional real estate advisor to get advice before starting any big project.