Structural repairs, such as replacing old roof components and fixing foundation issues, are a necessity, but cosmetics and remodeling projects should be chosen in their order of importance. Some updates yield more return on the dollar spent when it's time to rent or sell.

What's important in one part of the country might not be as critical in another — one more reason to know your real-estate market. Well-planned repairs and updates will result in an investment that you can turn around for a profit.

There's an old saying that you should not try to own the most expensive house on the block. It's true — averages rule the market. The eventual list price or rental fee of the house you're refurbishing should be at or slightly less than the majority of homes in the neighborhood. Don't get so carried away with updates that you end up with a structure that must be priced above the neighborhood's average selling price.