Many people think about selling their home but first decide to renovate so that the house will sell for more money. This is a mistake and I would like to explain why.
When you are living in a house you do the upgrades necessary to keep your house up, things like changing windows, painting, upkeep on gutters and roofs and even sometimes a small addition for the kids to have an extra room. These changes and updates to your house are things that you have to do in the course of owning a house for years. When you go to sell your house buyers will be comparing your home to other houses in the neighborhood and hopefully it is the same because those buyers are there to buy a house in a certain price range.
Lets say as an extreme that your neighborhood has houses that are in the 150,000 -180,000 dollar range and you decided to add an extra floor to your home that costs 50,000 dollars. Now once you have put that extra floor on the house you will want to sell your house, trouble is since you just sunk 50,000 into the house and you would like to get 60,000 for your trouble then you will need to get 240,000 for the house when it is listed and sold.
The kind of buyers that buy a 150,000 dollar house and the kind of buyers that buy a 240,000 dollar house are different people that have an idea where they would like to own. No one wants to have the best home in a poorer neighborhood instead they would like to have an OK house in a better neighborhood.
In the end you will of course get your home sold but you are not likely to get what you wanted for it. I remember the days back when I was a Realtor and you would go through a fantastic house that really didn't belong in the neighborhood that it was in, Realtors would marvel at this and that in the house but in the end didn't bring offers. People looking in that price range were not interested in the neighborhood they were interested in another area altogether.
Please remember that if you are thinking of doing an addition or adding some feature to your house that is out of place with where you live that it is better to thing of it as a feature that you want to have and live with and not think about how it will affect the resale price of your home.