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Let's make an easy example. 1 y" n! f; n3 X% T7 A
" T0 _+ M/ Q7 l/ ~% X, P" XSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.* B1 w( ~3 h1 `
After one year, he or she decided to sell it out. + r, b# S# W8 a/ W" w" j
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Cost (expense):
2 f7 Z; w) e5 i4 s2 bBusiness tax: 5%*100,000=5000 (please verify)" x) f2 E2 \% G" z9 k/ }: A: v
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Mortgage 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)
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7 E+ `, e3 L# ?& |7 Q2 ]% V& v7 MEstate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)% p' f/ p: Y1 A7 i+ J: \, j, s
9 T) B3 p q! L, F" Z% lReal estate management fee: 250*12=3000! G, r' s1 F% v; N
Total cost: 14000
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Benefit:
b1 D( a1 S9 g: ` T$ y* z( E% u! tThe saved rental: 350*12=4200
6 I ^4 Z6 B+ XThe rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=6000
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- o" L5 M1 \9 P( H4 RTotal benefits: 14400
2 f. E/ {* T3 L8 ~6 E1 \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 investment
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[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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