The following is from an article that was recently featured on doityourself.com
By: Dian Hymer

You may have settled into your new home and discovered that it doesn't work for you the way that you thought it would. Or perhaps you've grown tired of searching for a new home. So, you're thinking about remodeling instead of moving.

Before you start knocking down walls, carefully consider the feasibility, practicality and cost of the remodeling venture. It's helpful to hire a design expert to consult with you about the feasibility of the project you have in mind before doing anything else.

Initially, try to hire a design professional who will charge on an hourly basis. Many architects want to develop a full set of architectural plans for you right away. This can cost thousands of dollars, which you don't want to spend unless you're definitely going ahead with the project.

During the feasibility analysis, you need to find out if your home can be modified to create the kind of space you want and need. You also need to talk with the local building or planning department to find out if there are any restrictions that would preclude you from completing the project, or ask your professional if they can do this for you.

Once you've determined that your remodel project is feasible, then give a good hard look at the practicality of the project. Remodeling is disruptive. It takes time. Can you and your family weather the storm? Anecdotal evidence suggests that a major remodel can put a fatal strain on an already shaky marital relationship.

Homeowner Tip: A common mistake homeowners make is assuming that when they sell they will recoup the money they invest in remodeling their home. How much you can recoup will vary depending on local real estate market conditions, the type of remodel project, and the length of time between the project completion and the sale of the property.

Generally, it doesn't make sense to tackle a major renovation if you plan to sell in the near future. If this will be a long-term home for you, then it may be worthwhile to invest in a major overhaul. But, keep in mind that design tastes change over time. The beautifully remodeled kitchen that looks fabulous to you today may look dated to prospective buyers when you sell ten years from now.

Kitchens are important to most home buyers. However, if you're planning on selling soon, you're likely to recoup more if you do a modest kitchen makeover than you will if you do a major reconstruction. According to Smartmoney.com, a complete kitchen makeover recoups 80 percent of its cost. A modest redo involving new paint, cabinet hardware and floor covering paid back 87 percent of the investment. These figures are based on national averages.

Talk to a local real estate agent whose opinion you trust to find out whether your remodel plans are likely to meet with market approval. The point of remodeling is to make your home better suit your lifestyle. But, it's also important to consider the resale potential of your improvements.

The value of a remodel project will vary from one place to the next. Even though nationally a major kitchen renovation only returned 80 percent of the investment, in San Francisco it's possible to recoup over 100 percent, depending on the quality of the renovation.

Your agent can also help you determine if you will be over-improving your home for your neighborhood. Ask to see comparable sales information on homes like yours and also on homes similar to your hypothetically remodeled home.

The Closing: Keep in mind that most remodel projects end up costing more than budget. Factor this in to your cost analysis.