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Let's make an easy example.
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* q' x$ O4 `0 R" }% qSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.) {3 y1 Y! l$ k s1 k; E1 ?
After one year, he or she decided to sell it out. ! y: A. {* \$ \6 L* j% L
% }; I4 |4 n8 D0 G8 c& t+ F" O) x0 nCost (expense):
/ F: [, G: z" I+ B; N5 s- UBusiness tax: 5%*100,000=5000 (please verify)
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- U4 x3 X& w+ r( \9 W/ R! _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)- t2 v0 D# |* ~0 i9 d: b
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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" Z/ Z2 r8 s: E2 ~- l
Total cost: 14000
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9 D4 {! ?1 M h# M9 [: c( JBenefit:7 I8 o+ y( N& t- ~: U7 r, G
The saved rental: 350*12=4200
6 {) O/ F( u/ i% ~: u& G) }The rental income from tenant: 350*12=4200( I# b k7 y H% d% H. ~. }
9 Z7 z+ F# H% e( A! OValue increase: 100,000*6%=6000
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Total benefits: 14400: l; V W: j7 K- j' U
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 investment+ r4 i& R- ?5 n( n
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[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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