Bathroom Renovation – Protecting Our Investment Or Luxury Overspend?

We just completed a bathroom renovation for our primary residence in New York City. Updating our 5×8 bathroom set us back almost $15,000!

We replaced everything, so labor is the bulk of the cost. Our fixtures and finishes are pretty standard, and this kept the total budget down – yes, $15,000 is still a standard bathroom renovation for NYC.

You can find a handy remodel calculator on HomeAdvisor.

Did we need to renovate our bathroom? $15,000 is a down payment on a rental investment in some parts of the US. It is a year of tuition at a public college (and our youngest starts next year). Or we could use that money to simply prepay some of our outstanding mortgage debt.

Is it worth it to renovate the bathroom? There are both financial arguments and non financial arguments to consider.

The financial argument leans towards no

We renovated our kitchen in 2015, shortly after we moved in, because the kitchen was in much worse shape. That renovation set us back $25,000.

However, you have food and cooking safety issues to consider with a kitchen, not just the cosmetics. It was worth the money to replace old appliances that might break any day and cabinets and counters that never seemed clean enough even after a deep scrubbing.

On the other hand, our existing bathroom was outdated but functional. If we had to sell our apartment with the old bathroom, we could do it. But without improving the bathroom, we would not be able to list for the same price as a fully renovated unit, although the discount we’d have to offer probably wouldn’t be as much as the $15,000 bathroom renovation cost.

Another consideration is that it is harder to force appreciation these days – home renovation returns are falling, according to Think Realty, a real estate industry publisher.

We bought our apartment as part of an estate sale, so it was discounted about 30% off comparable units. After the money spent on the kitchen renovation, our great deal was cut by half – we had now spent the equivalent of 85% of a comparable unit. If we did the bathroom renovation right after the kitchen (i.e., the same year that we bought the unit), we would have spent 90-95% of a comparable unit. The remaining 5-10% would be eaten by closing costs if we ever did sell, thereby wiping out our savings from the estate sale discount.

Since the bathroom was arguably just a nice-to-have and would have turned our amazing real estate purchase to break-even, the financial case for the bathroom so far is a toss-up – we would be spending the money we had made in the transaction for no equivalent financial gain.

But since it is arguable that there might be better returns to be had on other investments with that same money, the financial argument now pushes more towards foregoing the bathroom renovation.

The non-financial argument is Team Renovation all the way

However, financial return on investment is just one way to look at a renovation project. When you live in the home:

• there is the utility you get from higher quality surroundings;
• there is the enjoyment factor
• there is an emotional benefit of walking into a space that is beautiful

Our kitchen turned out beautifully, and I still marvel at how much I love it every day. I am still surprised by a sparkle in the grain of our quartz counter top that I hadn’t noticed before. I am still grateful for our soft-close cabinet doors when I forgetfully slam a door, but it doesn’t make the expected loud noise. I am still excited by how our floating shelves and clear cabinets mean that I can finally showcase the cool finds I have amassed over years of flea market shopping.

It’s almost three years after our renovation, and I could still be an infomercial spokesperson for our kitchen!

I expect the bathroom to be just this way. While we didn’t go overboard on the budget, we were able to pick out small touches that will make a significant difference in our day-to-day. By gutting and replacing everything, we could choose the colors we wanted, opting for some gray in the vanity, tile, paint and floor, so there is some color but not too much for us or the small space. We picked a mirror with some shape, so it wasn’t just a big box over the sink. We have a slightly curved tub, which provides more space and some visual interest.

Right now we have just a clear shower liner which gives a beautiful view of the bath tiles when looking into the bathroom (white with just a bit of blue/ gray marbling), but I may get voted down if the family opts to put up a proper shower curtain.

Financial Independence is about more than finance

I happen to value aesthetics. I enjoy looking at beautiful things. I am happier and more productive in a space that is uncluttered, full of light, and with objects that evoke curiosity, even if it’s just a faint pattern in the tile or a curve in a mirror or snazzy looking heating pipe (see old and new heating pipe below).

Financial independence is about having the freedom to follow your values (like aesthetics) and your interests (like clear cabinet doors for your flea market finds!).

I recently reconnected with a former colleague who is similar to me – we’re both married, she is just a few years older, we have the same number of kids and they are close in age. She is entrepreneurial too and values freedom and travel. While Scott has jumped on the bandwagon with me and left his corporate job almost two years ago now, this colleague’s husband continues to work a demanding job that keeps him on the road, working long hours, and unable to go on adventures with his wife. My colleague admitted that her husband doesn’t love his job, has enough money to easily retire, but can’t break away. How can she convince him?

Maybe it would help if he paid for a bathroom renovation that won’t impact the value of their real estate! I didn’t give my colleague that suggestion because Scott and I weren’t renovating our bathroom when I caught up with her.

But the decision to renovate our bathroom is about saying yes to something (and spending money on it) for more than just the financial ROI. It is about prioritizing utility and enjoyment right now.

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Financial independence is not just be about amassing a certain amount in your portfolio. You know you have reached FI when you are comfortable enough to spend your money on the things that matter now.

We decided aesthetics, utility and enjoyment wins the day and that is why we went ahead. I will feel rich every time I use my new bathroom.

How can you bring more enjoyment in your day-to-day?