One of the ways home buyers make the most of their money these days is with sweat equity — using their own time and labor to increase the value of their home. Maybe they want a bigger house in a nicer neighborhood than they could afford if they bought a fully renovated home. Maybe they're looking for a fixer-upper to flip so they can make a profit and do it again. Maybe they're just handy folks who enjoy the challenge of a home improvement project.

Realtor Wagura Kamwana of Keller Williams Realty Intown Atlanta says this is particularly popular in reviving intown neighborhoods, where there's almost a blank canvas for artists and creative people to go in and do a good renovation.

Christopher Oquendo/Special (ENLARGE)

Henry Bryant and a neighbor are revamping a cottage next door to Bryant's house.

Christopher Oquendo/Special (ENLARGE)

Alan and Tina Bradford enjoy the game room in their made-over basement.

Christopher Oquendo/Special (ENLARGE)

Ralph Long III has done the bulk of the work on his Sylvan Hills home.

"People living in suburban areas expect all the houses to be valued similarly, but intown, buyers don't think anything about fixing up a house when the houses on either side are in bad shape. They know if they bring the interior up-to-date with new features and keep the character and charm of the house on the exterior, they'll have a house that will appeal to other folks who want to live intown."

Kamwana offers seven suggestions to be sure you and the house are right for a sweat equity project.

• Don't pay too much or it will be many years before you'll get your money back.

• Get a good home inspector who's familiar with older homes to give you the real scoop on what's wrong with the house.

• Be realistic about your skills and what you'll be able to do well.

• Be realistic about your budget and plan for everything to cost way more than you expected.

• Have emergency funds available for all the other things that will need fixing.

• If you're going to live in the house while you're working on it, be sure you want to live in a construction site for as long as your projects will take.

• Be sure you can deal with the stress that a long-term renovation can bring.

She's not trying to discourage home buyers from taking on a sweat equity project. "If you're project-oriented and have done some of this work before, you may be able to turn a fixer-upper into your dream house," she says. "It's worth considering."

Let's meet three homeowners who've put a little sweat into their own projects.

AN INVESTMENT ALMOST READY TO PAY OFF

Owners: Henry Bryant and Jeff Hackney. We talked with Henry about this investment project.

What: 1891 three-bedroom, two-bath cottage in East Atlanta

Why he bought the house: I live next door. The house went on the market and there was a feeding frenzy with investors. My neighbor and I decided we'd rather do the work ourselves and know what was going in next door. My partner is a contractor and I had done lots of work on my own house. It felt like a good fit.

Sweat equity on his own home: My wife and I bought our house almost 30 years ago and we renovated most of it ourselves. We had looked in other areas but found if we bought those houses, we couldn't afford to do anything to it. Sweat equity was our path to the home we wanted to have.

What he and Jeff are doing to this house: We like to say that there's an 1890 house here and a 1920 house, as well, because there had been so many renovations over the years. We tried to preserve the outside of the building and put things back inside to keep the feel of the early 1900s while adding lots of modern features. We've added a laundry, walk-in closets and a master suite, and we've kept the old doors and the old door hardware so the house retains much of its original charm and character. It's still an old house, but it's updated for today's needs.

How long until they'll be done: We're hoping for the first of November.

His advice to other potential investors: You're not supposed to buy for investment with your heart, but that's what I did. I had known the family that had lived here since 1943. Be sure your budget is realistic and watch out for things like rain that comes on a day when your carpenters have left and no one thought to cover the open part of the house. It happens.

FIVE YEARS AND ALMOST DONE

Owner: Ralph Long III

What he bought: 1932 three-bedroom, one-bath bungalow in Sylvan Hills

When: bought in 2002

What he paid: $110,000

What he estimates he's put into the house: $70,000 in materials and labor

What he's done: I hired others to replace the plumbing, electrical and HVAC systems. Personally I've stripped the woodwork and built judge's paneling for the master bedroom and dining room; completely redone the kitchen including vaulting the ceiling up to 18' and putting in my own tile countertops; fenced in the back yard, laid sod and added a sprinkler system; gutted the bathroom, put in a new concrete subfloor, added a refinished 1902 claw-foot tub and beadboard; installed canister lights under the eaves so the house "glows"; installed a central music system and stubbed the attic for a future bath.

The most rewarding project: I got emotional when I installed my kitchen faucet. It seems funny, but it had been a long time coming. I think the kitchen may be my favorite room because I really like what I've done there.

Is he finished? After almost five years, I'm almost done with this house. I'm working towards finishing in November because my wife and I have a baby due in December. One reason it's taken a while is that I'm a property manager and a Realtor working on my broker's license. My company is Mindsweat Properties. I believe in this community. I think Sylvan Hills is a hidden secret and I've made it a point to treat this house like it deserves to be treated. We get a lot of bad/quick renovations over here, and the neighborhood deserves better.

What it's been like to live through: I've had dust everywhere. Dust, dust, dust. You breathe it in, you change the air filters in your air conditioning constantly. My dining room has looked like a construction zone for years. I've been in active renovation since 2002!

Advice to other home buyers: Know that you're going to spend three times what you thought.

ONE YEAR AND WE'RE FINISHED

Owners: Alan and Tina Bradford. We talked with Alan about his sweat equity project.

What they bought: 1972 five-bedroom, three-and-a-half-bath ranch with finished basement in Dunwoody/Sandy Springs

How long did the renovation take? We bought the house in April 2006 and physically moved in June 2006. We worked on projects throughout the house on nights and on the weekends, finishing up in July 2007.

What they paid: $425,000

What he estimates he's put into the house: $90,000 in materials and labor

New appraisal: $640,000

Why they bought this house: I was commuting from Snellville and the commute grew from 30 minutes to an hour and 45 minutes. I wanted to be in town and was looking for a house that needed work so I could put the money and time into it to achieve a higher dollar value. It's got a little over 2 acres of land, and it's in a well-established subdivision. It just had gotten a little rundown. We could see the value others missed.

What he's done: The house was definitely done in the 1970s. There were mirrors everywhere and when we took them down, down came big chunks of drywall. We had to redo about a third of the drywall in the house. We took up terra cotta tile floors in the kitchen, laundry and baths and put down 18-inch by 18-inch travertine, and did the same thing in the foyer, replacing an old slate floor. We painted inside and out and replaced a lot of the lighting. We replaced the old acoustical tile ceiling in the basement, changed out the fixtures and put a granite top on the bar. Put in new fixtures and new hardware everywhere. I did everything but the electrical and plumbing work. I made sure we did stuff to code and by code.

CAN YOUR HOUSE PAY FOR YOUR LABOR?

We talked to Scott Evans, president of Family Mortgage of Georgia, to see how a homeowner could get paid for their sweat.

Getting your cash out by refinancing:

• Step one: Buy a house

House price: $100,000

10% down: $10,000

Mortgage: $90,000 at 6.5% = $603 per month (includes private mortgage insurance of $35 a month)

• Step two: Renovate

Budget: $7,000 in materials and the equivalent of $13,000 in labor

•Step three: Have the house appraised (you'll pay the approximately $300 appraisal fee). The house appraises at $140,000.

• Step four: Refinance and keep the mortgage value at 80% or below so you can avoid paying PMI.

New mortgage: $112,000 at 6.5% = $707 per month

Closing costs: $2,500

Cash in hand: $19,500

•Alternate step four: Sell the house for $140,000 and pocket the profit.

Evans says even if you don't want to get cash out, you might consider asking for an appraisal so you can stop paying that PMI every month. Lenders have varying guidelines, but generally speaking, if you've been holding your mortgage for at least a year, work with your lender to have an appraisal done. You'll pay the approximately $300 appraisal fee, but if your current mortgage is 78% or less of the value of your home, the lender must remove the PMI and there will be no refinancing charges.

TIPS FROM THE PRO

Alan Bradford is a general contractor who's been in the business for 19 years as Tabco Contracting. He offers these tips for home buyers considering a sweat equity project:

• Have a plan and stick to it. Don't play the "as long as we're at it, why don't we do XXX game." That's the best way to kill your budget and your timeline.

• Call the material suppliers. Get prices, get a person's name, ask them how long the price is good for. Then put together your budget. Now you know what it will cost.

• Use licensed subcontractors and call their insurance companies to be sure their coverage is in force while they're doing your job.

• Never do any electrical, structural, plumbing or HVAC work yourself, unless you're a licensed professional in that field.

• Show up on the job site when you're using subcontractors. Be there to see the problems they run into so you can be involved in the decision on how to correct things. This is critical on a renovation when you never know what you'll find when you open up a wall.

• Do what you can. Demolition, wallpaper, painting — or pick up the materials if your contractor is willing and you'll save yourself the markup.

• Spend your time and your money on the things that matter. A good roof, a waterproof exterior, solid foundation — that's what comes first. Then look at your kitchen and baths and finally add storage wherever you can.