Perhaps you've heard stories about homeowners who've greatly improved their net worth by remodeling homes and selling them. But, while remodeling can add value, there's no guarantee that a future buyer will pay you enough to recoup your investment. E.g. Cost of new roof, windows, furnace within one year may not have the value as was the cost. Beware of over-improving the property for the neighbourhood. Buyers may not pay more than the property is worth on the open market.

Some homeowners fall into the trap of thinking that their home is worth what they paid for it, plus the money they've invested in remodeling projects. This logic is often faulty, and can result in unwise investments.

Replacement cost value is not the same as market value. Market value is the price a ready, will and able buyer will pay for a property. This is the only value that's relevant when you're selling your home. Replacement cost value is an important consideration when you're evaluating how much insurance coverage you'll need to replace your home if it burns down. But, it may have little bearing on the selling price of your home.

Renovations can indeed add value from a market perspective. When the owners put the home on the market, they received multiple offers. They accepted an offer at a price that more than returned the money they'd invested. They replaced flooring, kitchen and bathrooms and redecorated the principal rooms.

To realize the most from your remodeling efforts, stick to classic designs and finishes. Trendy designs may look outdated five or ten years from now when you decide to sell.

Don't invest in a major renovation if you're planning on selling in the near future. It's highly likely that you won't be repaid for your investment.

Stick to cosmetic facelifts if the sole purpose of your investment is to fix your home up for sale.