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Old 15.10.2020, 16:17
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Considering selling property

I have a house that is 5.5 room with garden plus a 2.5 room separate flat. Both are currently rented out long term bringing in about 44k per year. As the 10 year mortgage fix is about to expire. I'm considering whether just to sell it and simplify my life (one less tax return to do as property is located in a different canton). In such a situation, would you sell and at what price?

Just seeking some EF wisdom
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Old 15.10.2020, 16:33
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Re: Considering selling property

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I have a house that is 5.5 room with garden plus a 2.5 room separate flat. Both are currently rented out long term bringing in about 44k per year. As the 10 year mortgage fix is about to expire. I'm considering whether just to sell it and simplify my life (one less tax return to do as property is located in a different canton). In such a situation, would you sell and at what price?

Just seeking some EF wisdom
People do seem to be paying 400 months rent, that would be 1,466,667. I would rip their arms off specially as you would only pay 677,000 for such a property based on your 6.5% yield requirement.
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Old 15.10.2020, 16:36
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Re: Considering selling property

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People do seem to be paying 400 months rent, that would be 1,466,667. I would rip their arms off specially as you would only pay 677,000 for such a property based on your 6.5% yield requirement.
I'm always fascinated at this sort of answer. It's English, yes, but not as we know it.

I do realise that Phil also speaks this odd dialect, so I hope it makes some sense to him.
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Old 15.10.2020, 16:47
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Re: Considering selling property

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People do seem to be paying 400 months rent, that would be 1,466,667. I would rip their arms off specially as you would only pay 677,000 for such a property based on your 6.5% yield requirement.
If I could achieve 1467k, I would definitely sell! I just remembered I also have the opportunity to roll over the gain too which would be a factor for selling.
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Old 15.10.2020, 16:52
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Re: Considering selling property

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I'm always fascinated at this sort of answer. It's English, yes, but not as we know it.

I do realise that Phil also speaks this odd dialect, so I hope it makes some sense to him.
I will translate

Rent is 3,666.67 a month.
Prices achieved appear to be about 400 months rent this equates to 1,466,667

Phil has said he expects yields to be at least 6.5%
Therefore Phil would pay a max of 44,000 devided by 6.5 x 100 = 676,923
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Old 15.10.2020, 16:58
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Re: Considering selling property

Are any of them on a mountain and do they look like a goat shed?
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Old 15.10.2020, 17:03
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Re: Considering selling property

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so I hope it makes some sense to him.
yup. made perfect sense
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Old 15.10.2020, 19:11
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Re: Considering selling property

You should be able remortgage at a very low rate, maybe under 1% yet get a nice income way over this. Everything else being equal, that's a nice carry.

There's always the other part of the equation: do you need the money, will you need the money in the coming years? It doesn't sound urgent but give a some thought to what you'd do with the (taxable?) proceeds?
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Old 15.10.2020, 19:34
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Re: Considering selling property

Pros:

Ability to roll over gain into recently purchased property [roll-over probably not applicable as it was converted to a rental property]
Less admin and one less tax return to do
Deleverage and raise cash

Cons:

Lose leveraged cash-flowing asset
Property is in a lower taxed jurisdiction which currently helps with taxes

Last edited by Phil_MCR; 17.03.2021 at 02:34.
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Old 15.10.2020, 20:28
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Re: Considering selling property

I thought that Grundstückgewinnsteuer was a cantonal matter, so if you sell in the canton and don’t buy again (a more expensive property) within a couple of years you have to pay the tax. Or have I misunderstood you rolling the gain into your new property?
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Old 15.10.2020, 20:37
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Re: Considering selling property

London houses especially big ones are lucky to get 3.5% return before costs.

I have a close friend who is renting a 4 bed house in Clapham sw4 worth 1.5m and he is struggling to get 3k a month
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Old 15.10.2020, 21:19
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Re: Considering selling property

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London houses especially big ones are lucky to get 3.5% return before costs.

I have a close friend who is renting a 4 bed house in Clapham sw4 worth 1.5m and he is struggling to get 3k a month
That tells you it's not really worth 1.5million, hope the mortgage is less than 750k
I have a property I have had on the market since 8th May, I chose to price 18% below what the agent had said as I wanted a quick sale within 3 months, still sitting there, will probably try another agent at a higher price (You never lose with property LOL)
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Old 15.10.2020, 21:40
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Re: Considering selling property

If its priced nicely please PM me the rightmove link - I m in the market for a london BTL to add to the portfolio

Today there was a mchugh and co auction - some very good value properties in the auction http://www.mchughandco.com/Auctions/Auctions.aspx
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Old 15.10.2020, 21:44
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Re: Considering selling property

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I thought that Grundstückgewinnsteuer was a cantonal matter, so if you sell in the canton and don’t buy again (a more expensive property) within a couple of years you have to pay the tax. Or have I misunderstood you rolling the gain into your new property?
It is within the whole of Switzerland, not cantonal...
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Old 15.10.2020, 22:11
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Re: Considering selling property

I just wonder why one would go out of one’s way to acquire property at the first place and sell it prematurely. Isn’t it easier and headache free to go stock market or funds full artillery instead? I believe in property investment and easy arithmetics as a safe heaven but one mustn’t put all the eggs in one basket either.
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Old 15.10.2020, 22:24
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Re: Considering selling property

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That tells you it's not really worth 1.5million, hope the mortgage is less than 750k
I have a property I have had on the market since 8th May, I chose to price 18% below what the agent had said as I wanted a quick sale within 3 months, still sitting there, will probably try another agent at a higher price (You never lose with property LOL)
Well believe it or not the house next door sold for this cash just a few months ago after Covid - He reckons that to buy it again would cost 100K in stamp duty and he will never qualify a mortgage that size again
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Old 15.10.2020, 22:36
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Re: Considering selling property

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It is within the whole of Switzerland, not cantonal...
Taxed at cantonal and/or communal level according to this link
https://www.reichlinhess.ch/en/2020/...h-and-lucerne/

It may be different between cantons, but I‘m sure in Schwyz you have to buy again within the canton to defer the tax. I can‘t find the link right now unfortunately.
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Old 15.10.2020, 22:41
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Re: Considering selling property

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If its priced nicely please PM me the rightmove link - I m in the market for a london BTL to add to the portfolio

Today there was a mchugh and co auction - some very good value properties in the auction http://www.mchughandco.com/Auctions/Auctions.aspx
The property is in Kanton Zurich, not London.

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I thought that Grundstückgewinnsteuer was a cantonal matter, so if you sell in the canton and don’t buy again (a more expensive property) within a couple of years you have to pay the tax. Or have I misunderstood you rolling the gain into your new property?
Rolling the gain into a new property that I bought.

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I just wonder why one would go out of one’s way to acquire property at the first place and sell it prematurely. Isn’t it easier and headache free to go stock market or funds full artillery instead? I believe in property investment and easy arithmetics as a safe heaven but one mustn’t put all the eggs in one basket either.
I used to live in the house and rented it out when I moved.
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Old 15.10.2020, 22:42
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Re: Considering selling property

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Taxed at cantonal and/or communal level according to this link
https://www.reichlinhess.ch/en/2020/...h-and-lucerne/

It may be different between cantons, but I‘m sure in Schwyz you have to buy again within the canton to defer the tax. I can‘t find the link right now unfortunately.
Actually, it would make sense to be on a cantonal level since the tax is payable to the canton and a deferral to a property in a different canton would shift tax base to a different canton, but i haven't looked into it.
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Old 16.10.2020, 09:46
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Re: Considering selling property

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I have a house that is 5.5 room with garden plus a 2.5 room separate flat. Both are currently rented out long term bringing in about 44k per year. As the 10 year mortgage fix is about to expire. I'm considering whether just to sell it and simplify my life (one less tax return to do as property is located in a different canton). In such a situation, would you sell and at what price?

Just seeking some EF wisdom
Cash is trash so selling for cash doesn't make sense. Selling for another property that suits your needs better it depends on transaction costs the the selection of the new area.

If you go ahead with the sale, find a good realtor and list it for the market price in the area. Buyers will determine the selling price.
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