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Let's make an easy example. * V; w3 d9 _& K% e( J* ~1 o
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Suppose one person bought a house worth 100,000 last year. It's a two bedroom style.4 O' ~9 z7 m3 [9 |
After one year, he or she decided to sell it out.
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Cost (expense):
$ t( ~& n8 U, O" e! CBusiness tax: 5%*100,000=5000 (please verify)
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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)* t+ h! ~$ |9 a/ g% C# ~) v
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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)( y! o" f' g: s: J
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Real estate management fee: 250*12=3000
, ]$ M- ?. N3 J9 u6 A, qTotal cost: 14000! ~5 F! H. T G" G
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The saved rental: 350*12=4200
1 K v2 w1 i% Q0 AThe rental income from tenant: 350*12=4200 x0 O- o' p& {
0 Q Y( U7 n4 l+ q# l7 t9 |Value increase: 100,000*6%=6000
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6 n- ?7 S. n2 n3 J1 O# JTotal benefits: 14400
2 ~1 u k3 o* [" ISo 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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