There are lots of reasons, and lots of ways, to add value to your home.

Most people remodel to improve a home’s livability. For others, it’s something they do before selling to make their home more marketable. Many improvements not only make the home more attractive to buyers, but will also increase the selling price by all or most of the cost of the improvements.
 
Since most of us will eventually sell our home anyway, it makes sense to make any of those improvements with high paybacks that we would also enjoy now. Spring is the perfect time to make the most cost effective improvement possible for many homes and townhouses. A few small inexpensive shrubs planted in the right places now will grow into a handsome, and much more valuable setting for your home 5-10 years from now. A few hundred dollars and an afternoon with a shovel will provide you some good exercise and can add thousands to your homes eventual resale value.

Kitchen and bath updates usually return a high percentage of their cost on the sale of a home, as long as they aren’t overdone. Decks have gotten increasingly popular in recent years and their contribution to a home’s resale value also reflects that. If you are going to be in your home less than ten years, updates might worth it from a personal enjoyment standpoint even if you don’t recover all of your costs on the home’s sale. However, home decorating designs, components, and tastes change over time. If you plan to be in your home longer than 10 more years, today’s makeover may start to look dated by then. That could reduce the cost recovery from the improvements.
 
There will also be interim savings with many upgrades. If you replace an old inefficient refrigerator with a high efficiency (energy star rated) refrigerator, your savings on electricity will be significant. New insulated windows may be eligible for a federal tax credit, and they’ll also reduce your home energy consumption in the future.

One thing you want to do is to avoid expensive home improvement mistakes. Try to avoid making improvements that add little to your home's value. The National Association of the Remodeling Industry publishes an annual return on investment (ROI) survey of various types of remodeling investments which will be helpful in that regard.
 
Lack of planning is another mistake. You don’t want to change designs or major components in mid project – that can be very expensive. You do want to allow plenty of time to get the job done – it is not uncommon for a job to take twice as long as the contractor originally estimated. There are plenty of good books on the subject, and free tips on the American Homeowners Foundation's website.

You want to make sure the contractor is licensed and insured. Ask to see their state contractor’s license and personal liability and property damage insurance policies (and workers comp insurance policy if they have employees). Use a comprehensive contract including as much detail as possible about the work to be done. You can order a model contract with space to fill in the details for $7.95 on the American Homeowners Foundation's website, or an attorney can draft a customized contract for