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Let's make an easy example.
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, X& \* ?% h+ k! ? t( VSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.( b* m" d u# S
After one year, he or she decided to sell it out. 9 m! R( b2 R3 m4 w0 _
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Cost (expense): 6 D; |+ L% x# e- U) ~
Business tax: 5%*100,000=5000 (please verify)
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a2 l6 t3 A4 k" n- E/ dMortgage interest: 5%*100,000=5000 (not only the loan interest you pay the bank, but the interest of inital payment of house should also be accrued)1 u' c7 H& Y+ ^: Q
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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)9 d+ k8 \+ X1 h$ }& x) D' N
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Real estate management fee: 250*12=3000; R0 r+ z/ ?* W/ r j) k8 M; Q7 I) A
Total cost: 14000% q+ A6 k0 K( ~$ S0 T; A1 ?7 j3 o6 @
0 ]/ \& ]: }% A% |9 y: A1 X( VBenefit:6 I# V9 u! j& o& w% l5 i
The saved rental: 350*12=42005 A4 H# K1 v" T: d& S' h. r7 K
The rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=6000* ?, m) X; R" o" E* P
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Total benefits: 144004 S7 U( _. i( [, e2 {
So if both purchasing and selling transactions are conducted in one year, just slight gain could be achived. So the edmonton estate market is not worthwhile for short term investment5 y! v. M" p$ G
' ^1 |1 W& b5 H. s( T[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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