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Let's make an easy example. # t1 x& A- [. W5 q/ E! O
# x" G- L( ]) q( J; ]( [. oSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.( z' }/ G* {1 t* r5 X
After one year, he or she decided to sell it out. ) }3 e1 k: h5 `) k4 r2 h1 r$ p/ n! h
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Cost (expense): $ e( c8 D& G+ }$ S: S8 y6 a0 z8 m
Business tax: 5%*100,000=5000 (please verify)
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4 }4 K9 w2 e% I) i" I+ _: c1 K8 HMortgage 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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# Y; p( R8 V5 REstate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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Real estate management fee: 250*12=3000
* t& F( P% ~: ^/ X) ?6 U1 m3 zTotal cost: 14000
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Benefit:2 Y' K/ K% L( ^) c0 D6 a
The saved rental: 350*12=42002 M+ j, q! I! ^1 g" W
The rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=60005 M. T; ^- p6 X! M3 r& R" ]
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Total benefits: 14400
7 V) R2 u5 O+ ~7 V" f# z% lSo 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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