Did We Make A Profit Selling The Second House?
We answered this question after the sale of our first house (spoiler: we picked up in the bubble and sold in the recession), so now we are back to do it again – but this time the coins stacked a bit more favorably, thanks both to selling in a slightly better market and by not sinking as much into this house’s improvements (it helped that we did not need pricey upgrades like a new roof and windows this time around).
We managed to sell this latest house for $23,000 more than we picked up it for back in 2010. And our best estimate is that we put around $14,500 into improvements that stay with the house (i.e. not furniture or other decor that moves with us). That means we made a net gain of about $8,500. Here is an estimated breakdown of where the money went:
- Kitchen renovation (including appliances, new flooring, backsplash, lighting, counters, opening the wall, etc): $6,955
- Deck building/staining/sealing: $1,783
- New patio: $1,252
- Built-in desk in the office (it conveys with the house since it was custom-built for that area): $124
- Laundry appliances & built-in shelves: $712
- Hall bathroom update: $168
- Guest bathroom update: $51
- Crown molding that we brought in throughout the house: $218
- Fireplace upgrade with new tile/mantel: $147
- Board & batten in hallway: $57
- Pergola over carport: $214
- Column update for porch: $198
- Window boxes/plants for them: $132
- Paint/stain for every room, built-in, and outdoor area (this does not include furniture paint/stain since that comes with us): $800
- Landscaping, light fixtures, curtains, and miscellaneous other items that stay (like new border tile & toilet in the main bath): $1,700
- Total: $14,511*
*some of these prices are total costs for projects, including some items that will not convey with the house – for example the bathroom makeover costs include art and accessories that came with us. So this is not a ideal tally.
But regardless of how meticulous our math is, we are incredibly grateful that in simply a few years we were able to increase the value of this house so much – especially given our experience with our first house (to which we barely boosted the sale price at all – stupid market!). But of course, we owe a 3% fee at closing to pay the buyer’s agent commission (but we would have owed twice that amount if we used a seller’s agent, so we are thankful for that as well).
In the end, we likely broke about even on this house. House flippers we are not. But house lovers? You betcha. The thing we are most excited about is at last getting to roll all of the equity that we have built over seven years of paying the mortgage on our first two homes into this new house – nearly cutting our mortgage balance in half. Yeehaw! That was certainly worth the wait.
What about you folks? Have you brought in up what you’ve spent on a house and compared it to what you got back? We consistently hear kitchens, bathrooms, and outdoor “square footage” (decks, patios, etc) tend to up the resale value of a house. Has that rung true for you? One thing we have not truly heard much about are built-ins, but we think they are such a pleasant feature (like the built-in desk we made for the office, the ones in the dining room that we inherited, and the one that we brought in to the laundry room).
So built-ins will certainly be making an appearance at the new house (especially since we are already starting to notice a lack of built-in storage here). They add a pleasant feeling of function + customization, and both of the built-ins that we brought in were under $125, so that is certainly some pleasant bang for your buck!
