For the longest time, two words summed up a good home improvement strategy — “kitchen” and “bath.” However, with kitchen remodels in particular spiraling ever further out of control, it may be time to rethink conventional thinking. According to an article by Kathy McCleary on HGTV.com, money may be better spent on necessary improvements like furnaces, air conditioning units and gutters. While it may not be pretty and trendy with “designer colors,” wise home shoppers will understand the immense value in the words “new HVAC system.”

According to Remodeling magazine’s 2007 Cost vs. Value Report, new siding is the most rewarding home improvement, with a 79.7% to 88.1% return on investment. Their list cites fiber-cement siding as being a better investment than foam-backed vinyl siding, and a comprehensive list of all siding options can be found on About.com.

The highly-touted kitchen remodel, at a minor level of around $21,000, only recoups about 83% of cost at resell time. Cost recovery on both a minor kitchen remodel and replacement siding project has dropped significantly from three years ago, when McCleary wrote her article. Then, the projects would net a 92.9% and 92.8% cost recovery, respectively, according to the Cost vs. Value Report.

By 2007 numbers, a major kitchen remodel drops cost recovery down to only 78.1%. And bathrooms fared about the same or even worse, depending on the type of project. A bathroom addition of around $37,000 would net only 66% cost recovery and a remodel around $16,000 would net only 78%. Some other projects that yield big results on the market include the addition of about a $10,000 wood deck at 85.4% cost recovery and replacement windows in wood or upscale vinyl at 81% cost recovery.

It’s something to think about as spring kicks into gear and your inner handyman starts surfacing. Don’t be dismayed if the necessary home improvements are eating up the savings you had set aside for the more desirable home improvements. The financial reward may be more than you expected, regardless!