Hello fellow FIRE seekers and other good folk. Here we go again!
This is a big one, people! The one you’ve all been waiting for, for more than 2 years *drumroll*
It’s time to reveal the finale numbers behind our renovation project. We will finally get the answer to the million dollar (well, kroner) question:
Was it worth the trouble?!
Well, read on and find out 😎
Status on the project
Just a quick recap, to quote myself:
Roughly 2 years ago we began the renovations on an old house that we purchased for the healthy sum of €440,000 (see Life Update #3 for a budget breakdown).
We’ve now put about €160,000 into the renovation (and incurred about €10,000 in “living expenses” while we lived in our own garden during the renovation). On top of this we’ve had “discretionary” spending in the excess of €10,000.
Since my previous update (spoiler: lots of budget graphs and numbers in that one – if you’re into that sort of thing), we’ve managed to complete one more project; WE NOW HAVE CLOSET DOORS! YAY!
This (almost) marks the finish of the last major indoor projects. We still have one project left, and that’s to build a “bookcase door” for our boiler room. Right now there’s just an opening directly from the kitchen into the boiler room, and it’s not that nice to look at. But we’ve lived with it for more than 1 year now, so I guess a few more months is not going to hurt. After this, we have a garden/bike-shed project in the front yard, and some more deck building (nooooo!) and then I think we can call it quits for this round.
But all in all, the major lines are now in place, and this means that we’ve managed to get a valuation from our bank (and a realtor).
So without further ado, I give to you the finale numbers for our renovation project *drumroll*
The bank appraised the house at DKK 5.4m (€750,000) and a realtor would list it for DKK 5.8m (€780,000). Since we’ve put in around €620,000 we’ve managed to put a decent amount of equity in our pockets with the renovation. This is obviously quite the relief, as we didn’t really know if it would end up being worth all our troubles. This puts our current mortgage principal way below the 40% LTV target.
So, in the end all our hard work yielded a return of more than €130,000 (~17%). It was a tough year, but given that this return is TAX free (that’s how it works in Denmark!) I think that it’s pretty respectable. However, I don’t think we can take all the credit. The general house prices have been soaring lately, so I think a good chunk of the yield is simply just due to the general house price inflation. But anyway, it’s there and we’re of course thrilled with this result.
Would we do it again?… Not anytime soon, for sure! By the time we’re ready for another round, we’ll probably be too old! HAHA
Status on the finances
After getting the appraisals, it’s now time to remortgage. At least that’s the plan at the moment. Our mortgage rate is up for renewal on January 1st 2026, and we’ve been looking at re-mortgaging into a 3% fixed-rate 10-year mortgage. Yes that’s somewhat of a pivot, but now that I’ve experienced that our economy can handle a €1,300/month deficit, I figured why not just put it towards the mortgage?
Mathematically, I know that putting it in the market would probably be more beneficial in the long run, but given that both our pensions are currently fully invested in the market, I don’t feel like adding more fuel to that fire (pun intended) at this time. I consider the 3% fixed mortgage, as a kind of “savings account”. We can always remortgage if we want to put the money to work in the market (or in another property?!).
I guess my risk appetite has not changed for the better during these past few years HAHA. I’m in my early 40s, and I really should be willing to take more risks. But if anything, this journey has taught me to follow my gut. And right now, my gut is telling me that I need a predictable goal for the next decade; become debt free.
And here is how that’ll look like:
Now, I might turn this around and make a “House equity” graph instead, because it’s just more fun to watch things grow 😛 But this is the amortization schema for the loan that we’re currently contemplating. We have not signed the deal yet, but it’s open to us for the next 6 months. We’re leaning heavily towards taking it…
Of course putting an extra €1,300 towards our mortgage means that we will not be able to put it towards our Total Balance (our freedom fund). The big question is, if we’d be ok with that. For now I think I’m ok with it, as we’ve not been able to save significantly towards our Total Balance for the past few years, but with the mortgage approach we would simply force ourselves to save more towards our future.
What do you think? What would you do in our situation?
Status on our life
We’ve extended the family from 3 to 4. When I say “we”, I mean my wife and my kid…
After a couple of years of being an animal-free home, we now have this little bundle of joy leeching off of us every day. She’s very cuddly and friendly though.
Having pets is honestly not something that I have missed, but my wife and kid has been begging to get one. I was against it for several reasons, but the primary reasons are the price for feeding them, and the “freedom-price” that you pay when you have to get a CAT SITTER, every time you have to leave the house for more than 1 day. Now that we have her, it’s something that I live quite fine with though (it’s not my cat, so I don’t buy the food or worry about a sitter when we go on vacation – that’s on the people who chose to add it to the household 😛 ). But I do enjoy cuddling with it though that I have to admit 🙂
Other than the cat and the upcoming remortgage, life just seems to be ticking away in the Total Balance household. X-mas is rapidly approaching, and soon we’ll be celebrating a new year. It seems like life goes faster and faster, the older you become.
I managed to squeeze out a post about what idle hands can do to you, and a lot of people unfortunately visited the article shortly after it was published. I’m saying “unfortunately” here, because it turned out that somehow an early draft was posted, so it only had 1/3 of the content! HA. Luckily I noticed after a few days, so it has been rectified. So if you thought it had a weird ending, do revisit it and let me know what you think!
My blog also managed to turn 7 years in complete silence. As a birthday gift to myself (or the blog?) I have moved hosting provider to a cheaper option. For now it seems like it’s ok, but I do sense that it’s quite slower than the older provider (but it’s 1/3 of the price, so I can live with it). I didn’t manage to do a 7-year birthday post, but I’m already kind of looking forward to continue the tradition of writing a year-end post (the last one is from 2022/2023). This year has seen some big milestones, and I can already reveal that the year-end post will contain another big milestone! (consider yourself teased!).
Happy Halloween, Merry X-mas (too soon?!) and see you in the new year! 🙂
Wow, congratulations with that valuation dude, you guys should be proud. We had way worse luck with our 8 years of property ownership, it seems we are £50k down after inflation even though we added a new bathroom and kitchen.
And congrats on the new member of the family! Our cat is 12 years old now, has been to three different countries, on boats, trains, planes. Recommendation for keeping the costs low –
Buy the Bozita (nordic brand!) wet cat food on Zooplus in bulk, it has the best meat quality (keeps health costs down,) it’s cheap, and comes straight to your door. We used this in the UK, Sweden and the USA.
Get the big automatic feeders for dry food and water (the ones that aren’t electric.) We’ve left our cat for 2-3 days alone with these and he’s fine, just a bit smelly in the litter tray when we get back. Hire a cat sitter to come to your house to feed when you’re away (there are a lot of sites that have ratings for them etc,) with the automatic feeders you can also get them to come every 2 days which is much cheaper.
Cut nails etc yourself, skip regular vet checks, they do nothing and charge the world. Only go when really needed. Self-insure, it’s cheaper in the long run, insurance has a lot of times when they won’t pay out as well. If you need some common medicine like UTI medicine, get the human version, it’s the same thing and 100x cheaper for the quantity, you just have to portion it into smaller amounts (check online.)
To your question about the new mortgage, of course I would tell you to invest it in a low-cost index fund instead as it’s almost guaranteed to make you more money in the long run… But, it’s your own call, and if you physiologically feel better paying down your mortgage, or you think you would spend the money otherwise, it sounds like a better plan!
Funny! I was just reading your October update when I got your message here 🙂
Congrats on the big move! Looking forward to hear more about your new place and your future plans there.
I was just drooling over your net worth chart. You have 10x your interest in 3 years? Wooooah! We started around the same time, and it’s clear that your strategy has greatly outperformed mine, so I know I should just index and chill! Haha. But for some reason, I just can’t get myself to do it. It’s silly, but apparently it’s just not for me. I feel like I missed the longest running bull market in my lifetime 🙁 luckily our pensions has been invested and done great the past couple of years.
We had cats since I was a child, and we’ve never taken them to the vet for regular checkups haha. We had two cats in the old house that died of old age, and they’ve only been to the vet when they had been in a fight haha. Anyway, as I said I don’t worry about the cost of food atm, cause I’m not buying it 😛 But will look into the zooplus tip!
How are things in the north? Winter is coming (pun intended 😛 )
I have too much anxiety to do anything other than index and chill now! Aha. I don’t trust myself to do anything else.
Yeah, I just looked at the chart again, seems most was in the last 2 years. It doesn’t look right. I don’t know, maybe the maths is off? I guess it’s the compounding thing right, 24% and 23% growth years in 2023 and 2024, 16% so far this year – it snowballs.
“I feel like I missed the longest running bull market in my lifetime.” I felt like this when starting, though. There’s always been a bubble. If the markets crashed by 30%, would you take the opportunity to invest everything in index funds then never look at it again?
It’s VERY cold and wet up here. But it feels cozy inside, and it’s nice not having neighbors or cars. When you’re next coming to Manchester, let me know! It’s a couple of hours on the train – or Edinburgh is another couple of hours.