Question

You own a house that you rent for $1,275 per month. The maintenance expenses on the house average $235 per month. The house cost $226,000 when you purchased it 4 years ago. A recent appraisal on the house valued it at $248,000. If you sell the house you will incur $19,840 in real estate fees. The annual property taxes are $2,850. You are deciding whether to sell the house or convert it for your own use as a professional office. What value should you place on this house when analyzing the option of using it as a professional office?

Answer 1

Answer: $228,160

Step-by-step explanation:

The value that should be placed on this house when analyzing the option of using it as a professional office will be the value of the net proceeds from selling the house and this will be:

= Value of house - Real estate fees

= $248000 - $19840

= $228,160

Therefore, the value that should be place on this house when analyzing the option of using it as a professional office is $228,160