As we prepare to close on the sale of our first home, we have been reflecting on all of the work that we have put into making this house our home.
In just a few short weeks we will be collecting all of the equity from our home sale. We know what we paid for the house and how much of our mortgage remained, and we know what the selling price is now. But Jordan and I have been asking ourselves, once you subtract the cost of the remodel, did we really make any money?
In some ways this is going to depend on what you mean by make money. Sure, we could include all of the interest on the mortgage, taxes, maintenance and upkeep, and even sweat equity in the cost of the house (I mean, I don’t know how we would begin to calculate those hundreds and hundreds of hours, but theoretically it could be done).
We’ve been in the Vineyard house for 7 years, and we’ve pretty well overhauled the entire house. From baseboards, crown molding, and window casings, to creating whole new rooms (hello butler’s pantry!), we’ve updated just about every aspect of the inside AND outside of the house.
So how do the costs break down? And was it ultimately worth it when we sold?
To determine our total costs, I ended up going room by room listing projects. Then I went back in our receipt and order histories, and tried to track down as many actual bills as I could find. Some of the large purchases were easy, like the floors. Some of the smaller more tedious purchases were trickier to track down, like the trim and crown molding in each and every room.
Here’s an overview of all of our costs, by room and project.
It seems like a ton of money right? I’m also sure I missed some bills along the way. Honestly, if I had to guess I think we probably spent somewhere in the neighborhood of $130,000-150,000 all together.
Now to determine if it was worth it or not… again this will depend on your definition of “worth it”. For us, we are defining “worth it” as the difference between what we are selling the house for and what we owe on our current home loan, less the amount we have invested in home renovation. Again, you could argue that we should subtract out taxes, interest, maintenance and upkeep, sweat equity, closing costs, realtor’s fees… even things like utilities if you wanted to get crazy. Keep in mind, however, that during the past 7 years we had to live SOMEWHERE, and likely those type of expenses would have been similar wherever that was.
At the end of the day, once you account for what we spent on the remodel, we made about a 200% return on the money we spent on the house.
In our opinion it was worth it… what do you think?