Visual bullet hits are great fun to create - as are any other type of destructive effects. All of these effects are most realistic when they visible cause some damage, as would in real life.I already covered how to create great gun fire (muzzle flash) effects as well as how to create realistic looking bullet hit effects.
However, I did not talk much about how to create great destruction effects. This video applies not only to bullet hits but should prove useful for any sort of damage effect you are trying to create
I like the psychology of this effect as it kind of works in reverse
Rather than adding a visual effect to make an object appear broken, we shoot the scene with the object already broken and then use visual effects to cover up the damage until it is destroyed.
Shoot your scene with the already destroyed element in it. For my tutorial clip, I pre-tore up a paper target and filmed the scene of me pretending to shoot at it with my fingers.