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Let's make an easy example. ) t8 \6 U% U% [' U8 x) d; R
- @5 d H- O( p# @9 ~: C QSuppose one person bought a house worth 100,000 last year. It's a two bedroom style. K- v9 Q) ~! j: T
After one year, he or she decided to sell it out.
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( F `* U( E' N0 g2 d6 q( Z( QCost (expense): 9 k# q# S/ r0 `# `" ~$ K
Business tax: 5%*100,000=5000 (please verify)
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5 G6 d# b( Y2 bMortgage 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)' C. U' x% D' \: W
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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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4 E2 x0 v4 L: V5 _' o+ V$ p( `Real estate management fee: 250*12=3000( I6 z8 R$ F9 B, w! s; u0 w
Total cost: 14000
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( v2 X1 t; o5 g3 N) d" X IBenefit:
2 d; c( v- W8 i- ~* j% t: `The saved rental: 350*12=4200& F4 S0 ^" k3 m1 U3 X5 a( a
The rental income from tenant: 350*12=4200! Q I3 K( a9 h: L3 Q
3 Y5 K* R# l; V, L1 mValue increase: 100,000*6%=6000' B' P; d+ h6 ]1 h/ \
8 U a9 @: V, h1 f" O4 N! g1 GTotal benefits: 14400
% x" ?( U$ G: oSo 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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