Firstly, if you plan to make improvements - Do not spend a fortune doing up your home - you will not get your money back. As house prices continue to fall, research shows that previously profitable improvements, such as extensions and new kitchens, can leave you out of pocket by many thousands of dollars.
According to the study, the more you spend the more you stand to lose because the cost of the work will not be reflected in the sale price. The average cost of an extension, for example, is $33,800 but it would add only $13,568 to the property's price.
Despite that, reports indicate a near 20 per cent jump in the number of people who want to borrow money to improve their home compared with the same time last year. Some homeowners have decided to expand their properties rather than move while others are hoping that their improvements will help them to sell at a better price. So how can you boost the value of your home?
Get the decorators in
This is the only home improvement that will really boost your returns. Lets say that the average cost of painting and decorating a home is $1,330, but the cosmetic improvement adds $3,557 to the value of the property. Opt for neutral colours and don't forget the woodwork.
Avoid big names
Installing designer kitchens and spa-quality bathrooms used to be a fail-safe way of adding thousands of dollars to the value of your home. Not any more. These days a new kitchen costs about $18,700 but will add less than $5,000 to the value of a home. The average price of a new bathroom is $7,700 and will add just $2,892 to the property price. So stick with the basics if you are redoing these rooms.
Know the right price
In the UK for example the cost of home improvements has risen significantly over the past two years, according to the Royal Institution of Chartered Surveyors. RICS blames the rising costs of transport and raw materials, as well as a shortage of tradesmen as Polish builders pack up and return home. Avoid being overcharged by spending £17.99 on The Property Makeover Price Guide published by RICS' Building Cost Information Service (bcis.co.uk).
Do it yourself
One study shows that almost a third of homeowners are planning to save money by doing their own home improvements. However, you will spend even more money and potentially devalue your home if you botch the job.
Clean is beautiful
The easiest, cheapest and most effective way to add value would be to clean ...everything. For $35 you can hire a steam cleaner for the week to sort out carpets and upholstery. Lined curtains should be dry-cleaned.
The white stuff
If your bathroom still looks tired after a good scrub, freshen up the grouting and the mastic. Use a grout pen to rewhiten any discoloured grout lines. It costs $3.98 -you can also buy a tube of mastic sealant for $3.73 (diy.com).
Let there be light...
Maximise natural light. Simon Buhl Davis, who runs Savills' Interior Services, has managed to shift difficult homes by removing net curtains. He recommends installing colonial shutters to the bottom half of the window or slat blinds.
...in every dark corner
Compensate for the lack of natural light in gloomy places such as basements or lower-ground floors by installing twice the number of light fixtures. Fit dimmer switches.
Get rid of clutter
You might not need to move at all once you have got rid of surplus belongings. Use eBay and Gumtree but save time and postage by asking buyers to pick up their purchases. Donate or swap your stuff on freecycle.org.
Hide the dog/children
Smelly pets and messy children put buyers off. Ben Rymer, of Strutt & Parker, recommends packing them off to Granny's and dressing your home with fresh flowers and glossy lifestyle magazines. However, buyers are more price-sensitive than ever. So if your home really will not sell, the first thing to change might be the asking price.
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