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Let's make an easy example. & ]0 a9 L2 r+ S# H& w/ B
' v6 a5 L7 w/ N7 Y: rSuppose one person bought a house worth 100,000 last year. It's a two bedroom style.8 X2 b$ X% I5 W m* A
After one year, he or she decided to sell it out. 2 A( T* l C9 I$ Q' \/ U
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Cost (expense): + q: H2 }3 ]/ w
Business tax: 5%*100,000=5000 (please verify)* e+ Q$ @6 x* ~
9 y6 X4 k- I6 F/ TMortgage 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)) [: p6 y d$ n$ ^! T% c
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Estate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)* u$ @- G3 E* `$ |* `5 f& K1 _' C
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Real estate management fee: 250*12=3000
8 U R9 v6 D: n6 VTotal cost: 14000: D! X# B! \5 z" a5 K9 y
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Benefit:
1 x' M" ~# O# LThe saved rental: 350*12=4200
8 `8 M! y$ M# h4 v, D, ?: OThe rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=6000
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Total benefits: 14400- O* c9 }$ q5 f! j7 W" \4 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 investment
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; q9 Q! A/ b3 o' A3 W[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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