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Let's make an easy example.
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Suppose one person bought a house worth 100,000 last year. It's a two bedroom style.. I9 X/ u9 f; _. e: F
After one year, he or she decided to sell it out. + u3 Q" m3 U1 @" H- A' J# D
2 b" D% ~6 Y8 z' NCost (expense):
7 k9 v3 x! D- {Business tax: 5%*100,000=5000 (please verify)
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( b$ q$ x" Q# s; O0 MMortgage 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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; p; X: l" R6 s9 v9 ^/ B0 zEstate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)1 M- H; e- p3 C1 |0 s# Y" S
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Real estate management fee: 250*12=30008 N3 C+ m4 P' Z- p2 d6 l- e) m2 g
Total cost: 140009 h% W3 _5 t# G1 b& x+ i- ]
$ X& K( M) F( A! TBenefit:
0 q5 B8 D8 D+ f: `7 {( J8 NThe saved rental: 350*12=4200; D2 p5 G5 d( W1 @! y# f+ T; E
The rental income from tenant: 350*12=4200
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" y6 w: B. W! C5 TValue increase: 100,000*6%=60000 N% ?* B" C4 g! _8 H: ~
$ G( N8 V( K/ ]8 |Total benefits: 14400 I ~7 i1 n. l6 p6 w* j' o4 @
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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" w$ N% V }; m5 X- k8 H[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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