It makes sense if you do not expect to get more than the going rate for your size house in your neighborhood.
Your current investment in the house + rennovation cost < after repaired market price = OK deal. The market isn't getting any better soon, so you might want to leave a little margin if you have to sell soon.
Many rennovations pay off over the long haul, but if you are looking at recouping your costs in a couple of years, you might want to look at moving or scale down the project.
I see alot of overimproved houses that the owners expect unrealistic prices. While they might have nice features and amenities, the neighborhood will never support the value.
On the other hand, if you own a small or outdated house compared to the rest of the neighborhood, you may benefit from an addition or upgrades such as flooring or countertops. Location does matter.
Watch out for the RE agents, I hear they are all evil.
