I address this subject in detail as well as some great, time-saving alternatives on a very information free webinar that I put together for house sellers. I would really encourage you to check it out at http://www.TheTrustedHomeBuyer.com
There are several challenges with updating:
(1) Your improvements may not be the "style" or "taste" of the buyer, in which case your investment is wasted.
(2) When you start updating, you really need to update the whole house, so that it is "move-in" ready. If only part is updated, then it will still only appeal to people looking for a "project" and you may not get the full benefit you were looking for.
(3) Unless you do the project yourself, the outcome of the renovation is dependent on the skill set of your contractor, which may or may not be a good thing!
(4) As a home owner, you may have difficulty objectively making cost-effective renovation choices, in which case you may overspend and again, thus limit the effective "return" on your investment.
So my advice is, if you go forward, invest a little extra time and money up front to formulate a plan with someone experienced in your area - they'll be able to give you great advice on how to get the most bang for your buck!