How can i improve the sustain of my home built banjolele?

Just a few tips for you. As a warning, I only skimmed everyone else's answers, so I sorry if I repeat. While making banjo ukes for the last 8 years or so, I often have had to defend the instrument as a real one that can have good tone or sustain of any kind. But, the proof is in the pudding, so they say, and I have worked pretty hard to get these little beasts sounding good.

First off, everything must fit as close to perfectly as possible. That includes neck to pot, pot to hardware, head to pot, etc...When you pluck the string, you want the whole thing to vibrate, not just the bridge and head. This is one reason I have always used a wooden dowel stick with the tailpiece bolt driven into it. Most old time banjos and National guitars use this approach. Those of you who doubt this idea can think of a time when you strummed a really nice telecaster or les paul in your lap unplugged. You can feel that it will have good tone, even unplugged.

Second, your setup at the nut and bridge matter a lot. As does your precision in leveling and crowning the frets. What may be a slight fret buzz on a regular uke may come across as a muted or wolf tone type note on a reso or banjo uke. You could be loosing sustain up the neck if the action is too low or high. I usually set it at .090 inches.

Third, the denser (and therefore thinner) the strings are, the more they will sustain up the neck. That is one of the reasons that Aquila tend to go thunk thunk up the neck while fluorocarbon or black nylon keep their zing as you go higher.

Lastly, a small rolled brass tone ring, a renaissance head that is pretty tight and a good hard maple bridge may help. Head tension may be a problem if your design does not have enough tensioners. Up to a certain point, the extra brass of more hooks and nuts help the sound out by adding a little more mass. After a while though it just makes it too heavy. I use 12 for an 8 inch pot.

Go for it!
 
I've just recently built a banjo uke, seems I've used the same 5 hook drum that you have with a skin head, I did used a dowel rod thru it tho instead of just a bolt...i was amazed at how loud it is and have placed a cloth dampener inside under the bridge...I like the slightly muted sound and short sustain it has....to me it sounds so 'old timey' natural.....Picks will highten the sound you're looking for, where as i like the low tones of using my fingers and thumb.
 
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