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Let's make an easy example. - {* {1 D6 A: Y" O8 e, i9 q1 U' {
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Suppose one person bought a house worth 100,000 last year. It's a two bedroom style.
; W$ F3 n3 U$ u: a7 e U. fAfter one year, he or she decided to sell it out.
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Cost (expense): / t( {- W" R3 L8 E5 ?$ S
Business tax: 5%*100,000=5000 (please verify)
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. q4 \1 b. b" ~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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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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' r: d9 ^8 Y3 n4 Y; }, UReal estate management fee: 250*12=3000
: g \ r! u& K4 d# dTotal cost: 14000
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( a6 O6 ?1 X1 qBenefit:. m# K$ I! o I: }9 w4 _
The saved rental: 350*12=4200
3 Z$ u0 t1 h# T* z# f% T1 fThe rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=6000
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Total benefits: 14400
+ k5 O) e T* O+ [5 C5 v2 }6 FSo 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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