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Let's make an easy example.
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& X6 K! G; L1 K6 ^. V& X# OSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.% W: X( \- L6 S
After one year, he or she decided to sell it out.
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Cost (expense):
1 }# Y# H$ g$ R: ?) mBusiness tax: 5%*100,000=5000 (please verify), U3 d) Q0 T o+ W+ h5 g
& u. x+ r1 r! [7 c L8 v8 rMortgage 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)& w: y+ l6 @: f+ j3 z
* S: X. t- D. }Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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Real estate management fee: 250*12=30004 L7 @" s2 ^6 M5 t- ^
Total cost: 140003 u/ d9 w$ s+ l$ n- m2 ?
' i% z( s$ ]0 |+ cBenefit:
. q1 b% |9 |. m6 W6 C% y7 dThe saved rental: 350*12=4200
' m6 B9 F" y- i+ nThe rental income from tenant: 350*12=4200! w M/ [4 C7 b7 b9 I1 X
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Value increase: 100,000*6%=6000
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* \% y/ F1 L5 ^+ q) u" T3 F% zTotal benefits: 14400
) ~( t( t$ Y2 f5 C% p3 h+ b$ {' @- ~* MSo 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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# [+ k: o6 q1 e, _( \0 i9 m[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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