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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., ~, D' m) x6 N5 m. z- ^# W
After one year, he or she decided to sell it out.
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Cost (expense): 5 c a3 h& ^( e# f* I
Business tax: 5%*100,000=5000 (please verify)
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+ s8 F6 J1 W2 e( w3 ~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)4 ~$ S4 k7 k# ^4 h( _* t3 a
s, P6 W" y' a, q+ p7 YEstate agent fee: 1%*100,000=1000 (this part is neglected in previous statement)
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Real estate management fee: 250*12=3000
2 U( F" |# S4 c5 D5 }( O) J! YTotal cost: 140005 ]- x `4 K! H% }% O* J/ @! g
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The saved rental: 350*12=42005 L9 c% I, E; }) J5 Q
The rental income from tenant: 350*12=4200
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Value increase: 100,000*6%=6000
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Total benefits: 144009 ]# L. w# r1 [6 A+ J2 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
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* e/ |+ l/ m% D; p' ~; }2 S2 x[ Last edited by knptmug on 2005-3-8 at 07:45 PM ] |
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