Question

You own a house that you rent for $1,125 per month. The maintenance expenses on the house average $205 per month. The house cost $220,000 when you purchased it 4 years ago. A recent appraisal on the house valued it at $242,000. If you sell the house you will incur $19,360 in real estate fees. The annual property taxes are $2,550. 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

$222,640

Step-by-step explanation:

The computation of the value of the house by considering the professional office is shown below:

= Recent appraisal on the house - real estate fees

= $242,000 - $19,360

= $222,640

We simply deduct the real estate fees amount from the recent appraisal amount so that the value of the house could come and the same is to be considered

Answer 2

The value i would place on the house when analyzing the option of using it as a professional office is $222,640

The computation of the value of the house by considering the professional office is to deduct the real estate fees amount from the recent appraisal amount so that the value of the house would be the difference.

= Recent appraisal on the house - real estate fees

= $242,000 - $19,360

= $222,640

Hence, the value i would place on the house when analyzing the option of using it as a professional office is $222,640