You've probably heard the stories: Someone buys a dilapidated house for a song, invests a few thousand dollars in materials, spends weekends sanding and painting and voila -- a showcase home worth several times its original price.

Then there's my house. The renovation project begun 15 years ago by previous owners is still not done.

Renovating a house can pay off nicely, but it takes a lot more planning and patience than you might think. Before you jump into a remodeling project, consider the pros and cons.

The Good....

• You can build equity quickly. Projects that enhance the "curb appeal" of your home, such as adding an extra bedroom or bathroom, may increase the value of your home by more than the cost of the project.

• Your profit may be tax free. If you own and live in your house for two of the five years before you sell it, you can pocket up to $500,000 of gain on the sale ($250,000 for single taxpayers) without paying a penny of capital gains taxes. You get the break without having to "trade up" or reinvest the proceeds in another house. Some enterprising -- and handy -- people have made renovation into a career. They move into rundown houses in good neighborhoods, fix them up, sell them for a gain and move on to the next house.

• You can enjoy your investment. Unlike stocks and bonds, which don't do much for your quality of life until you cash them in, an extra bathroom can benefit your family and enhance the value of your home.

• You can cut the cost of renovation by pitching in. Your "sweat equity" in a home improvement project can boost your profit. Even such simple things as cleaning up or washing down walls can help.