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Let's make an easy example.
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4 j* y. K G( [) X2 pSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.) K* R; W. ]# v% `! @0 H V
After one year, he or she decided to sell it out. - x' R8 |1 q4 V1 Z- G# e
( E$ n4 w- q9 ?3 J0 s3 }- v7 @Cost (expense):
: [( r$ h% p1 n9 z, c( F, _0 O$ VBusiness tax: 5%*100,000=5000 (please verify)3 a S2 o$ J. l" f
: n' L* E; m1 C0 o1 NMortgage 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); E/ C- Q, e* J# W! i
, w5 n+ F& d# TEstate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)( S. Z9 a7 j: X" ^
/ `- Q, t; [5 o+ c9 ZReal estate management fee: 250*12=3000
& S9 b" j4 I7 `2 a& k( E* J+ STotal cost: 14000
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5 S% @1 v# t6 H- r7 ?. IBenefit:! h- |" P! n+ ~; E
The saved rental: 350*12=42004 h$ j- ^$ L8 c r7 w1 T5 h$ w( w" @
The rental income from tenant: 350*12=4200. V7 S. s" u- H
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Value increase: 100,000*6%=6000
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Total benefits: 14400& u- `$ s2 t4 t6 ]; T: Z
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 investment7 D3 ^# D, V! i
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[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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