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Old 27.01.2021, 07:38
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Invest in rental property?

Hi all, I searched but couldn't find a recent thread about this topic. We have recently received an inheritance and are contemplating how to invest it, if at all. With retirement around the corner we could either bank it and slowly tap into it during retirement (which would be too easy to do), or invest it somehow so that it is available to our kids one day.



Stocks are too risky for our investment horizon, so we are left with either paying off our existing mortgage (which would lock it up and only save us a few hundred francs a month), or use it as a substantial down payment on a rental flat not far away. The flat is big, seems in good condition, built 1990, includes 2 underground parking spots, and has an excellent location. Has anyone bought rental property here, and what has been your experience? Thanks for any advice!
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Old 27.01.2021, 11:17
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Re: Invest in rental property?

I was looking into it a few weeks ago and concluded that the ratio between investments and rental income was better in pretty much all other countries I lived in compared to Switzerland. Simply speaking: housing is too expensive for the rent you can achieve.



But this might be region specific.
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Old 27.01.2021, 11:58
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Re: Invest in rental property?

Add to income and investment ratios the 'agro factor'.

The last thing I would want is to deal with stroppy tenants and one that moved out every couple of years...
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Old 27.01.2021, 12:13
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Re: Invest in rental property?

Yield on Swiss property has always been low, but with negative interest rates lots of banks and insurers looking for investment grade places to park their money have pushed further into real estate depressing returns further. I can't find it now but I remember reading an article pointing to a 1.5% net return. Given the risks involved I would look elsewhere, perhaps an international basket of real estate ETFs? 1 bad tenant, 1 void month, 1 replacement dishwasher is all that stands between a profit and a loss.
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Old 27.01.2021, 12:37
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Re: Invest in rental property?

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Hi all, I searched but couldn't find a recent thread about this topic. We have recently received an inheritance and are contemplating how to invest it, if at all. With retirement around the corner we could either bank it and slowly tap into it during retirement (which would be too easy to do), or invest it somehow so that it is available to our kids one day.



Stocks are too risky for our investment horizon, so we are left with either paying off our existing mortgage (which would lock it up and only save us a few hundred francs a month), or use it as a substantial down payment on a rental flat not far away. The flat is big, seems in good condition, built 1990, includes 2 underground parking spots, and has an excellent location. Has anyone bought rental property here, and what has been your experience? Thanks for any advice!
What about bonds? You should be able to match your rental return with pretty low risk (lower than property I'd imagine), and with much less agro.
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Old 27.01.2021, 12:47
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Re: Invest in rental property?

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Stocks are too risky for our investment horizon, so we are left with either paying off our existing mortgage
Stocks have a lower risk profile that property especially when you have already loaded up on property and are concentrated in one or two individual properties...

You reduce risk through diversification not concentration.
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Old 29.01.2021, 02:06
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Re: Invest in rental property?

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Add to income and investment ratios the 'agro factor'.

The last thing I would want is to deal with stroppy tenants and one that moved out every couple of years...

Anything rented out brings aggro, but hopefully more income than aggro. Perhaps invest in a holiday rental, one you can use yourself but also rent out.
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