You're up to the challenge. You want to add on or rip up or bump out–choose your verb. You have a vision, a blueprint and your contractor on speed dial. But while you're trying to decide whether oak or painted cabinets best suit your new kitchen style, you also should be thinking about practicality and resale. Whether or not you recoup your remodeling costs depends on two factors: the type of renovation project and your home's location.

WHEN TO RENOVATE FOR RESALE Resale value is only pertinent if you sell your house. If you're planning to live in your home for a while–more than a couple of years–you might have a better reason to renovate: the satisfaction it gives you and your family. “We encourage people to renovate for themselves,” says LuAnn Brandsen, editor of Renovation Style magazine. “If you're renovating with only resale in mind, you could have regrets,” she warns. “The whole point for our readers is to tailor their homes to their family's needs. If you're not renovating for yourself and your family, what's the point?” she asks. “The end result should be something that really pleases you, not someone else. And when you do it for yourself, even budget-conscious people forget about the money they've spent.”

PROJECTS THAT PAY OFF If you plan to sell in a few years, some home improvement projects will significantly add to the value of your home. A new kitchen, for instance, is regarded by home buyers and real estate agents as an investment in resale value. Resale experts say you can spend a little extra in this area, especially if you're planning on selling your home within a couple of years. One suggestion is that you can spend 20 to 25 percent of your home's value on a kitchen rehabbing project alone. That's a chunk of change, but according to Remodeling magazine's 2004 “Cost vs. Value” study, homeowners can recoup an average of 80 to 87 percent of what they spent on a kitchen remodeling project when they sell the home.

LOCATION, LOCATION, LOCATION It's the real estate seller's mantra, and location also dictates what kind of cash you can expect to recover from a renovation. For instance, the “Cost vs. Value” study shows that the same major kitchen remodeling project pays off differently in different areas of the country. Their advice is that if you're remodeling to improve your house for resale, you should consult a local contractor to cost out the project. Then run the numbers by a real estate agent active in house sales in your neighborhood to find out what the resale value might be.