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Let's make an easy example.
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Suppose one person bought a house worth 100,000 last year. It's a two bedroom style.
/ C2 ?5 Z0 G8 k: C1 g3 @) [( cAfter one year, he or she decided to sell it out.
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9 p& }0 D( X7 A }! N8 T6 Y$ [8 fCost (expense):
4 [) j$ u, s; w3 m, |" SBusiness tax: 5%*100,000=5000 (please verify)
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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)
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. Z9 o7 \5 s# d/ x0 B4 fEstate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)8 V& D/ u4 c: }+ R7 i( C
1 d: ?# |% Z3 M6 X- @5 k& O7 LReal estate management fee: 250*12=3000
+ H' D) W6 |$ t( S! q4 UTotal cost: 14000- I! n9 |9 g% N1 R
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Benefit:' ?+ g' l ]* ~! [
The saved rental: 350*12=4200
! |. H1 L9 L2 sThe rental income from tenant: 350*12=4200
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0 k) E# _9 f4 m- o7 m0 SValue increase: 100,000*6%=6000: H' Z: l# V- |
" w: `1 L) u% l1 w1 p% MTotal benefits: 14400" M% F+ J: z4 i( ?. b
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. l: t4 \6 {* I- S0 I, R! A& z3 l
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[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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