Whether your home is large or small, there are a few tools that are really nice have on hand. Some important things to remember: 1) Always buy the best grade of tools that you can afford. They will last much longer. 2) Take care of your tools. Have a place to store them where they can be easily found, clean them before you put them away, and apply a light oil if necessary to metal tools to avoid rusting.

Basic Hand Tools

General Purpose Hammer
Variousl sizes of nails and screws
Phillips Screw Driver (one large tip, one small)
Flathead Screw Driver (one large tip, one small)
Hand Saw
Pliers
Adjustable Wrench
Measuring Tape

Specialty Tools

Sandpaper
Light Oil
Hack Saw
Glue
Level
Utility Knife
C-clamps
Vise
Combination Square
Paint Brushes
Staple Gun
Paint Scraper
Wire Brush
Tin Ships
Wire Cutters

Power Tools

After you've set up your shop with the basics, you might want to consider adding some power tools. Once of the basic and most popular power tools is a variable speed drill. These can be used for drilling and adapters for driving screws are usually available. A circular saw can also be handy. The bottom line in my mind is that you should only pick up power tools for those jobs that are performed frequently. Power tools are usually expensive, so it makes no sense to purchase a tool that will rarely be used. You can rent, borrow or make do with hand tools in those cases.

I've found when I go to purchase a power tool that there are basically three levels of quality and expense. There are the very inexpensive and cheaply made versions, the extremely expensive versions that are meant for the professional, and then there is a "middle-of-the-road" version. Certainly if you can afford the professional version, go for it. Otherwise, always choose the "middle-of-the-road" version over the really cheap ones.