Well, this is a very contentious topic as "upgrades" are viewed by different parties in different lights. For example, which upgrades give the best return at sale time to the seller? Then, which upgrades give the seller the most satisfaction while they live in the house? And lastly, which upgrades are buyers looking for?
From the sellers point of view, the most long term satisfaction comes from an additional bathroom, (yes, I thought the kitchen as well), followed by a kitchen remodel and then a remodel of the master suite. But what about recovery cost when it comes time to sell?
Well the kitchen remodel will recover about 67% of cost, and the others, about 58% of cost. If you want to recover 100%+ then do the roof. Statistically the seller will recover about 105% of the cost of replacing the roof.
Well, let's start with the most surprising one first from the buyer's point of view. While a full kitchen remodel ranks right up there near the top, it is in fact not the most important. Believe it or not, the item with the most appeal to buyers is the ROOF. It ranks as a 9.6/10 followed by the kitchen at 9.4/10. Then come the master bathroom, hardwood floors and garage doors. I have shown some of the nicest homes to buyers who at the last moment did not buy the house because their perception was that the roof needed to be replaced and that would be a major expense. But in actual terms of dollars, it generally takes more to do a full kitchen remodel and gives more satisfaction. Go figure.
These statistics were published recently by the NAR (National Association of Realtors), However, in my opinion, they are somewhat skewed because of geographic preferences. In many parts of the country, the topography does not lend itself well to the building out of basements. Here in the South, particularly Georgia, we are able to build the most attractive basements, or as they say in CA, "Terrace Levels". A terrace level here becomes a wonderful living space and is used extensively if done well. They accommodate in-law-suites, theaters, media rooms, pool rooms lounges with fireplaces, wine cellars, workshops etc. So in my opinion and experience, a well done terrace level will sell a house as quickly as a gourmet kitchen and luxury master suite.
What would I do as a homeowner who is looking to sell my house? Probably update the kitchen, master bathroom and terrace level. If you decide not to sell after this is all done, then the satisfaction of living in the house with these upgrades will continue for a very long time.