The Appraisal Institute, the nation's largest professional association of real estate appraisers, encouraged homeowners to prioritize outdoor renovation projects when seeking to increase their potential return on investment. 

"The latest data shows that home improvements focused on the outside of a property are most likely to result in a positive cost-to-value ratio," said Appraisal Institute President James L. Murrett, MAI, SRA. "However, spending money on renovations doesn't necessarily generate a dollar-for-dollar return. Bottom line: cost doesn't necessarily equal value."

According to Remodeling magazine's most recent Cost vs. Value report, the projects with the highest expected return on investment are manufactured stone veneer, steel entry door replacement, wooden deck addition and minor kitchen remodel. Other projects with potential payoffs, according to the report, are siding replacement and universal design bathroom.

It may be best to hold off on big renovations if a homeowner isn't sure how long they will be in their home. The longer a homeowner stays in a property, the greater the opportunity for a return on investment.

Murrett advocated that homeowners considering improvement projects compare the planned renovation to what's typical in the local area.

"Renovations that elevate a property well in excess of community norms are typically not worth the cost when the owner sells the home," Murrett said.

For an unbiased analysis of what their home would be worth both before and after an improvement project, a homeowner can work with a highly qualified real estate appraiser – such as a Designated Member of the Appraisal Institute – to conduct a feasibility study. During a feasibility study, an appraiser will analyze the homeowner's property, weigh the cost of rehabilitation and provide an estimate of the property's value before and after the improvement.

"Unlike a real estate agent or broker, the appraiser is an impartial party to any real estate transaction and has no vested interest in the sale of a property," Murrett said.