Did We Make A Profit Selling Our Second House?

We answered this question after the sale of our first house (spoiler: we bought in the bubble and sold in the recession), so now we’re 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 didn’t need expensive upgrades like a new roof and windows this time around).

We managed to sell this latest house for $23,000 more than we bought 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’s 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 added 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 doesn’t 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 master bath): $1,700
  • Total: $14,511*

*some of these prices are total costs for projects, including some items that won’t convey with the house – for example the bathroom makeover costs include art and accessories that came with us. So this isn’t a perfect tally.

But regardless of how meticulous our math is, we’re incredibly grateful that in just 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’re thankful for that as well).

In the end, we probably broke about even on this house. House flippers we’re not. But house lovers? You betcha. The thing we’re most excited about is finally getting to roll all of the equity that we’ve 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 definitely worth the wait.

What about you guys? Have you added up what you’ve spent on a house and compared it to what you got back? We always 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 haven’t really heard much about are built-ins, but we think they’re such a nice 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 added to the laundry room).

So built-ins will definitely be making an appearance at the new house (especially since we’re already starting to notice a lack of built-in storage here). They add a nice feeling of function + customization, and both of the built-ins that we added were under $125, so that’s definitely some nice bang for your buck!

Comments

  1. MrsB says

    I will NEVER get back all I put in this house built in 1957. Bought at height of market (but had plenty to put down as sold a house that appreciated about 55%).

    All the insulation, roof, outside paint took up first year.

    Save, save, save – then did the kitchen, minor repair to screen porch, paint all but three rooms. Big hit.

    Small bathroom being done this summer – big bath next year.
    Then the HVAC has to be upgraded and a new hot water heater.

    Plus all the landscaping I’ve done.
    But – you know what? I love living here. It should be the last house I own – so I just bit the bullet and keep on fixing up.

  2. jeannette says

    i wanted to add, if the value of your DIY frugality has ever been in question, this post puts paid to it. to have paid others to do the work on house #2 would have eliminated your profit, as it did in house #1.

    • says

      Oh yeah, we think we could have easily spent 30K to outsource the deck, patio, and kitchen reno alone (maybe even more) so sweat equity definitely saved us. And the fact that we truly DIY and started this whole thing as a hobby is the icing on the cake. Getting to do what you love everyday = priceless.

      xo
      s

  3. Allison says

    Thanks for sharing! I find these posts quite interesting.
    When we bought our house, we renovated the kitchen immediately and then we have done landscaping as well. I hope to eventually be able to do the bathrooms too. We know that we have put more money than what we will get in return if we eventually sell, but I feel we also can’t put a value on comfort. I can’t imagine if we had kept the kitchen the way it was!
    We also refinanced a couple years back, but we decided to keep paying the same mortgage amount we were before, so we have actually knocked off 8 years from our mortgage by doing so!

  4. Kristen says

    What about the master bath update? Didn’t see it on the list?

    Regardless, it’s amazing you spent so little and accomplished so much!

    • says

      Dang, should have broken that out! The border tile, toilet, and light fixture are factored into “miscellaneous” since we did that over time in a few phases, so I didn’t have one final rundown post to link to (which is probably why I didn’t think to make that a bullet on its own).

      xo
      s

  5. heyruthie says

    thanks for the real-life “slow and steady wins the race and we’re not ashamed to admit it” attitude. when you read about other people who seem to have miraculous success, it seems so out of reach. but when I read your story, it’s basically, “we work our butts off, and eventually it all pans out.” i like that. it’s the real American dream–aided by the power of the internet–as opposed to overnight internet success. it’s one reason why i’m still reading y’all’s blog 5 year later :-) I’ve been a daily reader for years, and I’ve enjoyed each step that you’ve taken as you’ve made your dream come alive, including John quitting his job, and your pregnancy announcement, and dozens of other “moments” that were small steps, that have taken you far. i’m proud of you guys, and it inspires me to just keep grinding away, knowing that it does pay off.

  6. says

    Congratulations! Thank you for sharing the details. The market is just starting to bounce back so any profit you can make is well, a profit. I have not bought and sold but I recently refinanced on my house which I moved into 5 years ago. After itemizing everything for the appraiser (to show him I was prepared and very knowledgable about every upgrade in the house to help in my final appraisal cost) I estimate that the total spent on upgrades in 5 years was about $26,000. This includes a combination of hired labor/sweat equity and major upgrades (new furnace, oil tank, attic mold remediation, new sewer line, etc.). The house appraised for $34,500 above my purchase price. While owning a home is a huge responsibility and more expensive than renting, the tax return you get to roll into those upgrades is well worth it. :)

  7. Kathy says

    Did you include the cost to open the wall in the dining/living room? I think that was your number one improvementin your old house.

    I can’t wait to see what you do with your new home. It’s absolutely perfect for your family.

  8. Angela says

    Can’t believe the housing market in the US. You did such a big improvement on the house. We sold our first house and made $30,000 then We just sold our second house and made a $150,000 profit (South western Ontario, Canada). Just brought the dream home and are hoping to sell in ten years and make a huge profit. All new builds though.

    • says

      Woah! That’s awesome! I think it’s all about housing costs (homes are extremely affordable here, so they don’t double or triple when you do improvements like they do in areas with high house prices (for example, in DC a house could be worth 700,000 and then you redo that kitchen and bathroom and it’s worth $900,000 since it starts so high, but in our area things are much more affordable so even if they increase their value at the same percentage, the actual amount of profit is much lower to match the lower housing costs :)

      xo
      s

  9. Delighted for you! says

    Thanks so much for your openness & honesty! Looking forward to new adventures in the new house!

  10. cd says

    Regarding your built-ins – I’m so curious whether the new owners will use the spaces the same way you did. Your layout made perfect sense for you (though I didn’t see as much dinner-partying as I’d expect with that gorgeous giant table! That’s okay, we also have a gorgeous giant table and we use it like twice a year. Maybe). I wonder if the new owners will turn the front room back into a reception space/formal living room. Can you make friends with them to find out – or is that too weird? ;)

  11. Tasha gammon says

    Kinda off topic, but did you guys leave your refrigerator and washer and dryer at the old place or take it with you? Here in Oklahoma the standard is to take the washer, dryer and refrigerator with you and leave all the other appliances. Just curious. :)

  12. Amy says

    You also have to take into account that essentially your house is your source of income and (I’m no expert) but you probably wrote off every single item that makes any type of appearance in the blog! That is worth something too! Excited to see what you do with this next house- as we have “moved” with you (in a non-stalker way) through 3 houses now :) We are in the process of buying new construction soon (in Boise, Idaho) and as much as I love DIY, I’m excited to have a house that is just DONE, for once! :)

    • says

      Oh no, we actually can’t write off a single thing that we do to our primary residence, because then the gov would get a chunk of our home sale! So nothing is a write off and we pay for everything from our own pocket just like any DIYer would. We just write off things like printer paper in the office. Hahahaha!

      xo
      s

    • Jana says

      Glad you made this point Amy! You put a lot of sweat equity into this house that you technically ‘lost money’ on. But, all of that sweat equity provides material for your blog which earns you money for your family SO, you really didn’t lose any money. So yeah for you guys – we all have to spend money on our houses but you profit from it. Love it!

  13. says

    I think if you DIY built-ins, you can perhaps make a bit of money, but if you hire someone, I’m not so sure you’re going to be getting that back. I worked for a place that did built-ins and given the cost of those, there’s no way they were increasing the equity enough to make them worth it from that perspective. And once I even heard a realtor suggested they be taken out in a bedroom that the current owners were using as an office.

  14. Erin says

    We are currently just starting to think about selling our home, and unfortunately it’s still quite a sad market. We bought to get out of a horrible apartment situation so we jumped at the first one that ‘looked’ good. It was not so good. When we did our refi 2 years ago our house appraised for 20k less than what we paid for it and with the addition of 3 kids plus necessary home improvements we don’t have a lot of savings. We also realized pretty quickly how bad our neighborhood is with a murder just down the block right when we moved in, being robbed last November, SWAT situation one block over last summer. And now that we have school aged children, no good schools in our area. I cannot believe this is where we are right now. Cue the mini violins.