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Let's make an easy example. . a, l" B L L0 Z. A& E' T6 F
8 \% ^) k0 Z+ w, z* i: GSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.6 k+ L" |6 P3 K, U$ d2 U6 ^
After one year, he or she decided to sell it out. 7 z2 U, u9 F: G: f6 z* M
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Cost (expense):
! ]5 a2 m& X+ j }* N6 XBusiness tax: 5%*100,000=5000 (please verify)
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( j' [8 o3 N2 b u, `0 }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)7 ~* t4 {9 [3 k. q) g, ^% p+ B z9 P
5 `, C/ }1 B: _* h3 h- O& f/ [Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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Real estate management fee: 250*12=3000
9 }. _) c' d; a" x0 uTotal cost: 14000' n' L' f4 s6 |; K: W
s4 ]' |5 i3 F! s: Y, s/ a0 RBenefit:
7 P% {4 _* L2 }6 Z- R4 ?The saved rental: 350*12=42001 r; R9 d: S7 `2 |' P& h2 }
The rental income from tenant: 350*12=4200% v) W& a- I k- t" m6 a/ g$ a2 j
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Value increase: 100,000*6%=60001 ?) \: E* L2 s+ S2 g
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Total benefits: 14400
$ b6 n$ a& f$ l0 _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% a* [. {: a! X" L8 k* e& y& K
( k' ~1 k/ G$ g# Q, A0 T[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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