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Which is the better option for you

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Question - You bought your house for $350,000 ten years ago and now it needs repairs (you pay property taxes of $3,000 per year). You consult a renovations company and it quotes you $40,000 to fix everything.

You are thinking about simply selling your house (no repairs) for $425,000 and buying a bigger one for $610,000 (property taxes of $3,200 a year). You would be paying $1,100 a month in interest to the bank, but also collecting $800 rent from a tenant.

In five years, you think you will be able sell your current house for $475,000 (with repairs completed). Also, in five years, you expect the new house to be worth $635,000. Assuming a five-year time frame, which is the better option for you?

Reference no: EM132879908

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