Couldnt find anything on this topic from searching...

Anyone out there who can give a sense of typical rental yields, leverage/financing ratios, management fees and interest rates for doing residential buy to let in Switzerland?

Im guessing at gross rental yields of say 4 to 6% depending on the type of property, maybe 50% leverage at say 3-4% interest. How much one might expect to get out of a small portfolio of properties at the end of the day 3%? Less?

I do know there are some interesting planning opportunities on the tax front if you refurbish dilapidated properties too.

Daniel

what permit do you have? That will also be taken into consideration

C permit, but I wouldnt be looking in restricted mountain resorts etc anyway. A good relationship with the bank with a principal residence and decent pension pot as further collateral.

I did some further scouting on comparis, and a 4-5% gross yield seems ballpark right 2kchf per month for 500kchf properties on 3.5 room flats in residential blocks.

Daniel

Here is a link to some reasonably current data suggesting 4.5% is about right for Zurich region.

http://www.globalpropertyguide.com/Europe/Switzerland

I also found this old thread meanwhile, but its quite out of date, would be keen to hear any updates, and maybe a moderator wants to move this thread to the business forum.

Residential and Commercial property investment in Switzerland

I would also be interested to hear more if anyone has experience of BTL n Switzerland

What information are you looking for? This topic has been discussed a few times already. If you scroll down there may be similar topics listed or have a search around. Then if you have specific questions that haven't been answered you might find a better thread to post under.

Good luck!

Is that considered an attractive yield? Presume you might have other unexpected costs, like maintenance & vacant months, that chip away at that?

I suppose on the other side you get the extra interest payments on the debt which chip away at taxes, but not really seeing the attraction at that level.

There is in fact very little on Swiss buy-to-let experiences that I could find on the forum, and none of it recent.

4.5% would be a gross yield ie rent (excluding nebenkosten) divided by acquisition cost, you need to take all costs off that: management, insurance, finance, void periods, running and capital maintenance, taxation etc. and ignoring any capital yield.

Depending on location that is probably even an optimistic number for prime locations in the current market. For new builds it is the most you can current ask for without risking rent challenges (reference rate 2.5%+2%) from your tenants.

Is it a good return? Depends what you are looking for and if you think the Swiss property market is experiencing a bubble. My view is that if you are looking for a reliable form of fair inflation proof annuity type income, can leverage with some attractive bank finance, and are not overly sensitive to medium term (10 years) valuations, probably still worth considering.

A Swiss friend of mine has recently bought 2 buy to let properties, with several apartments each. He says that it is the only way to get a decent return on your money - providing you've got it! If you have to borrow, even at current rates, you are taking a big risk in his (experienced) opinion.

Agreed, but concerning borrowing it's the classic corporate finance question of leverage. It enhances your returns but magnifies your capital gains and losses plus adds interest rate risk. But with 10 year fixed rates available at say 2.5%, and the rental reference rate being at an all time low, I think if you have a 10+ year horizon on the valuations and enough headroom on the loan to value, you shouldn't be taking too much risk.

Daniel

We live in uncertain times and possible housing bubble - so I'd think it is a risk we couldn't afford to take ourselves. But each to their own- bonne chance. Must say too that it is really useful to have excellent local knowledge and contacts for repairs, improvements, etc, as our friend has + sufficient funds to pay for essential repairs, emergencies, etc.

with current valuations, it's hard to get a decent return here. you're probably looking more at 3% gross yield if that. however, swiss property may be a good bed still if you are betting on:

- it being just the start of the boom (but watch out for taxes) and want to cash in on capital gains
- want to bet on long term CHF devaluation and get a long term fixed rate mortgage

personally, i think in 2012-2013, we will see a very rapid deterioration in the economy with asset price collapses across various classes in particular property. switzerland will be an interesting market since there are a number of factors pro/contra house prices, but it will be hard to predict what the final outcome will be. i guess you just have to pick and hope for the best

there will probably be some bargains to come if you have a long investment horizon.

Another Brit obsessed with BTL...

In Switzerland the numbers just don't stack up on a smale scale. This is not the same property market and dynamics that exist in the UK.

Do the numbers... it's not that difficult to work out it's a mug's game.

Good luck though.

Yes, refurbishing costs can be tax offset