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Let's make an easy example. 6 x$ s, W! F5 F7 H# ^: Y, N
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Suppose one person bought a house worth 100,000 last year. It's a two bedroom style.
. r% v5 S4 }: y" u" |! v# S. gAfter one year, he or she decided to sell it out. 0 y7 N' l* | F* H8 L+ ]! c
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Cost (expense):
: g, v, l$ @/ `2 P0 v7 z) f4 NBusiness tax: 5%*100,000=5000 (please verify)' E5 e3 R: I4 T/ ]7 A8 c
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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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4 [* V1 s' [! p" M6 R8 h( p$ }2 PEstate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)% G9 I8 R* G8 v7 T8 v8 o
& d9 {; k, }6 x( S4 gReal estate management fee: 250*12=30007 J6 q1 O, ?( A" }3 [
Total cost: 14000$ j2 j8 U0 S) W7 {
; P3 p1 y1 s# z$ ~$ U7 ~Benefit:, o! h2 P& P* E7 c; L; h
The saved rental: 350*12=4200
2 D* T5 t+ ^' D1 m6 [' g1 tThe rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=6000& V. K+ W/ z. @' T3 ?( [
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Total benefits: 14400" D. O2 o4 a) n! I
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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, ?: M# S+ l8 ~+ T$ I[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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