Making decisions about improvements to your home is pretty simple if those improvements are meant to improve the quality of life for yourself and your family. You simply invest your money in those things that will mean the most to you. However, deciding which home improvements will be most appealing to potential buyers is another matters altogether.

Making the most of the money you put into fixing up your home is very important. Choosing your upgrades wisely, based on market research of which improvements pay for themselves, will help you get the most out of your home when you sell.

Determining which upgrades and improvements will enhance the value of your home and pay for themselves is often difficult. For one thing, it requires you to place yourself in a buyer's shoes, and see the home the way an outsider would. This is often difficult, particularly if you are emotionally invested in the home. It is tough to look on your own home as an outsider.

Therefore, it is a good idea to seek the advice of someone who can be impartial and provide that all important outsider perspective of home improvements and upgrades. A good place to start is with your real estate agent. Ask your agent which improvements or upgrades he or she feels would add the greatest value. It is important to focus on those improvements that will more than pay for themselves through enhanced home value.

You may also want to look at similar homes in your area. Pay careful attention to the amenities offered in similarly priced homes, and make your upgrade list accordingly. Naturally, it is important to take cost into consideration when making those upgrade plans, and make sure you can recover the cost when you sell your home.

While it is important to study your own area to determine the best improvements to increase value, there are a number of home improvements that are known to pay handsome dividends when it comes to increasing home values. These tried and true repairs include:

• Adding an additional bathroom is also a great way to improve the value of a home. This is particularly true if the existing home has only one bathroom. Many potential buyers will not consider a home with only a single bathroom.

• Remodeling the kitchen and/or bathroom has been shown in many surveys to increase the value of a home and provide an excellent return on investment

• A new floor can also be a good, cost effective upgrade to a home. This is particularly true if you are able to install the flooring yourself, since a large portion of the cost of installing a hardwood or parquet floor is the labor needed to install it. Those who are able to install a new floor on their own can often capture more than the cost of the flooring in increased home value.

• Basic home repairs like fixing old gutters certainly add some curb appeal, but they generally do little to truly enhance the resale value of the home.

• Painting is one exception to this rule. A fresh coat of paint in the areas that need is an excellent, low cost way to improve the appeal of the home. A fresh paint job costs only a little bit of money, but it can greatly improve the appeal of any home.

• A swimming pool is generally a lousy home improvement in terms of adding value. Homeowners rarely recover the installation costs of a pool when they sell their home, and in some cases a pool can actually turn buyers away.

When making upgrades or improvements to your home, it is crucial to keep good records which detail all money being spent. This will be a big help when computing the capital gain on the sale of the home, and when calculating the return on investment of each upgrade or improvement.

Being able to do your own home repairs, improvements and upgrades obviously will increase the return on investment of any project. The less you have to pay carpenters, carpet installers and other professionals, the greater your return will be. Some home improvement projects, however, require the use of a qualified professional. Unless you are an expert, improvements or upgrades involving plumbing, electrical wiring, heating or air conditioning systems should be left to the professionals.

Other home improvement projects, such as laying down a new hardwood or laminate floor, may well be within the skills of the average homeowner. Many home improvement warehouses hold seminars where homeowners can learn how to do these projects. If you can find such a free seminar, by all means take advantage of it. It will save you money on home upgrades and give you valuable skills for the future.