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Let's make an easy example.
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# N G+ _. D5 v( c) u( VSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.
7 F% g# G- v5 p6 N7 _After one year, he or she decided to sell it out.
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+ I/ H3 a6 P# B y% k1 }Cost (expense):
5 c" ~; c9 x# R( N1 |/ JBusiness tax: 5%*100,000=5000 (please verify)
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' T+ m, |# u6 IMortgage 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)2 U. l( i6 V4 I$ W- f, }- t
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Real estate management fee: 250*12=3000
u c0 V/ s" X# m( f9 O, GTotal cost: 140007 {, Q+ s# @6 g9 _& {5 w$ S5 `
: p1 w' A0 t J- i$ n/ B/ _( i1 _Benefit:
p8 k2 l& V4 R5 _- ]: S( QThe saved rental: 350*12=4200
$ t0 Y$ D. N3 C3 RThe rental income from tenant: 350*12=4200
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8 w: ?( f+ Q5 s- b1 z5 r- bValue increase: 100,000*6%=6000
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Total benefits: 14400
' L# O# l5 C; E, T$ l- ?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 investment6 u6 y/ b b R) D& L! s
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[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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