Debt not worth the return

Dear Dave: My husband and I are about to relocate to another part of the country. We’d like to sell our house, but we’re thinking about taking out a small loan to have some work done first. We could get in the $180,000 range selling it “as-is” but closer to $200,000 if we installed new roof, carpeting, exterior paint and concrete work. I know how you feel about debt, but what are your thoughts in this scenario?


Dear Kim: From what you just described, and assuming the concrete work wouldn’t be too extensive, you’re looking at going into debt probably $12,000 to $15,000 in order to get $20,000 more out of the deal. I’d just sell it. I wouldn’t go to all that trouble for $5,000.

Every piece of debt you take on compromises your financial security and robs you of your largest wealth-building tool—your income. Even if you guys are in good shape, you’ve got a lot of uncertainty and the potential for unexpected expenses in the months ahead. Just sell the house and get on with your lives. It’s not worth the hassle.


Dave’s latest project, EveryDollar, provides a free online budget tool. Follow Dave on Twitter at @DaveRamsey.