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Let's make an easy example.
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2 W- @, F6 [2 z7 [& }8 t% t) LSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.; R; n4 C2 H; E- J) l
After one year, he or she decided to sell it out.
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Cost (expense):
4 |1 p0 P* X# q0 UBusiness tax: 5%*100,000=5000 (please verify)
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" u4 Y$ F9 }1 d z- D! g' ]$ XMortgage 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)+ c6 w* x' O$ | K" ~
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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)8 x% n' Y8 f9 x* E& T, p
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Real estate management fee: 250*12=3000, A' ~. W T/ r& G- v; \
Total cost: 14000; J5 S. j6 @3 R7 i5 a! ]
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Benefit:
+ a2 \: Y+ N; b- W6 UThe saved rental: 350*12=42003 F: {% Y5 { O9 z$ k) K, z# t
The rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=60001 o, _ r6 ]' w
5 U1 |9 J) ]' I( LTotal benefits: 14400
8 [9 O% n' { x$ {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
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[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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