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When we bought our house nearly 27 years ago, we wondered if we were overpaying. It was the mid-1990s and houses in our neighborhoods of choice were in extremely short supply.

We couldn’t afford a house that someone else had already renovated to perfection. (Not that we could find one we liked.) Instead, we looked around at homes that hadn’t been touched in decades, where one day we could do a serious renovation.

So, the math we did went something like this: If we pay X dollars for the house and then spend Y dollars to renovate (either when we bought or at some point down the line), would the house be worth at least what we put into it when it came time to sell?