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Let's make an easy example. % v: n9 _$ P8 ?' r5 N* }& I, v
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Suppose one person bought a house worth 100,000 last year. It's a two bedroom style.
' u7 O) F3 |- Q/ rAfter one year, he or she decided to sell it out.
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Cost (expense): 0 v9 y9 P7 K2 M8 b8 e" d* l
Business 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)
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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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Real estate management fee: 250*12=3000+ ?3 t$ P5 p4 K5 i. a
Total cost: 14000
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- _+ t" M# ^2 @Benefit:
8 t7 [( l) j2 f: r; Z$ MThe saved rental: 350*12=42002 i# ?6 h$ d) Y' J
The rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=6000
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Total benefits: 14400
7 J/ v) F. [8 g7 e# o, S- aSo 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: e- }: H& U/ f$ {; S
) E6 j0 Z4 |) g% c[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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