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  #61  
Old 07.12.2011, 23:17
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Re: buying a house: where to start?

Are we still here? (US 2005):



or near here? (US 5 years later, 2010):

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  #62  
Old 07.12.2011, 23:31
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Re: buying a house: where to start?

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Starting here might help

Buying a house in swizerland

The "Buying a house in Switzerland" thread

If you are asking for help or advice, groaning others might not get you very far.

yeah however my groan was well placed i reckon - i would never groan someone who responds with a helpful reply - i just found that really smart ... so i groaned - after all thats what a groan is for right?

as for your links - thanks, i did read them a few weeks ago but they are slightly dated and the economy etc has been changing so fast so i thought it was time for a new thread - but thanks anyway
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  #63  
Old 07.12.2011, 23:37
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Re: buying a house: where to start?

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Plus they gave us a valuation that gave us leverage on negotiating the house price.
This is a really good point. If you do not get one from a bank, you can ask a local estate agent (although they will probably charge you but the fee is not so steep). It helps to have something concrete to negotiate with (although the standard Swiss method of property valuation is stark raving bonkers) in the face of a common trait in sellers here - they decide the (high) price they want and keep the house on the market often for months (years) until someone potty enough comes along to pay it.

Fees seem to be shared equally between buyer and seller (which is nice, coming from the UK system where the buyer gets it all).

Banks offer wildly varying rates, so do shop around. And start off by asking if anyone speaks English (if your French is not up to it) as when it comes to luring a new customer in, you'd be surprised at the language skills they can muster.
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Old 08.12.2011, 07:53
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Re: buying a house: where to start?

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Sorry, but the calculation are just not accurate. He's adding 2% per year on "forced capital expenses". 360K? I don't think so. How often is he planning on changing the kitchen? 10 times in 30 years? We've paid less than 0.005% in 5 years.

Renting the same property is more expensive, up to twice as expensive in some places, which gives you more money to put to work in your 6% investment fund. So you're not really keeping all your eggs in one basket are you?

To add to that, we HAVE taken a cool job abroad and still own a house in CH.


Not in Switzerland. It's perfectly normal to keep a kitchen for 20 years. How often are you changing your kitchen?



Absolutely.


Anyway, I'm not saying everyone should buy. I'm just saying these are all thing that need to be looked at when you are thinking of buying. Not one view or the other is "correct". You have to see what you expect and look at all the variables for a specific property/area, etc.

First of all, I was NOT trying to show a complete calculation that proves that buying is more expensive than renting. I said it is a very simple example. All it says is:

1) People typically underestimate the costs to improve and maintain the house they live in. This comes from my personal experience. If you move into a brand spanking new house with no work required for the first 3 years, that's fantastic. Take an average after 20 years and we'll talk again. 2% coming from 1% repairs and maintenace, and an additional 1% for improvements and add-ons and changes is not unreasonable.

2) The example only shows that the monthly cash "saving" of ~ 1000 CHF that a lot of folks point at as a no-brainer, can easily disappear if you take capital expenses and operating expenses into account properly. It does not say anything about what is the best way to go over the long term. That depends on personal circumstances.
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  #65  
Old 08.12.2011, 07:59
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Re: buying a house: where to start?

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No, I do disagree with it. That is why it is not the case for me, despite being invited to invest our 3rd pillar at the time of purchase.

And in any event, to release that pension value, surely you have to sell the house or increase the mortgage (just when you've lost your salary). That's not a barrel I want to be peering down aged 65.
Great for you, and I agree with your thinking. But how many people do you think have a spare 20% deposit in cash lying around?
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Old 08.12.2011, 09:33
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Re: buying a house: where to start?

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A tad harsh, yes house prices don't go up like in other countries, they also don't plummet in value overnight.

Why buy? well our mortgage is around 1/3 the cost of renting, we can do whatever we like to the house, whenever we like and in the current climate what else do you invest in?? sorry but the savings on rent over mortgage alone made it a no brainer for us.
With the Financial Crisis / Quantative easing I would say Pension Investments and cash in bank are not safe.

I would therefore suggest that Freehold Property is better just for that reason alone.
i.e. get what you can out of those Investment Plans and Personal Pensions and put it in your property.
At least you can control it. But be aware, Western governments will be after taxes on your capital in the long term because they will not get enough from income.

If money becomes worth nothing (which is seems to be going), your pensions are robbed by the financial markets ate least you are protecting your asset.

With low interest rates, either borrowing or return on your savings, you can only lose out long term.
If there is inflation, your property will go up in value because a new built property will cost more and increase the value of yours.
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  #67  
Old 08.12.2011, 10:00
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Re: buying a house: where to start?

Here is a nice calculator from the NY Times comparing buying vs. renting

http://www.nytimes.com/interactive/b...ml?ref=economy
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  #68  
Old 08.12.2011, 10:35
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Re: buying a house: where to start?

The OP has 3 great advantages: she has a long term Swiss partner, she speaks fluent French, and knows the area really well - and she also has her head firmly on her shoulders. Bonne chance Faeiry.
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Old 08.12.2011, 10:38
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Re: buying a house: where to start?

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Here is a nice calculator from the NY Times comparing buying vs. renting

http://www.nytimes.com/interactive/b...ml?ref=economy
Great site, thanks Karl!

The beauty is you can turn the knobs until your side wins

Seriously, if house price growth and rental escalation over the long term drops from 2% p.a. to 1 % p.a., there is virtually nothing in it, financially. And that was my point. Of course, you'll first have to find a nice house that costs 620 000 CHF!

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Old 08.12.2011, 11:26
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Re: buying a house: where to start?

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yeah however my groan was well placed i reckon - i would never groan someone who responds with a helpful reply - i just found that really smart ... so i groaned - after all thats what a groan is for right?
No, your groan was poor form.

This topic has been covered ad nauseum...... 4 pages later with links to related threads and opinions support this.

In no way had you indicated that you had used the search function, so you recieved a valied and equally lazy response.

Questions about property are just like "Is 120Kchf enough to live on?", repeatedly and mindlessly posting the same irritating and lazy questions does draw an emotional response from forum members.

Like any search function, if at first the search result doesn't succeed, try to use other similar phrases....... or at least indicate that you have read through some forum threads on the subject and tried without success, others will be more likely to help you.

For now, I hope you have gathered enough information to make your decision on whether you will buy a house or not...... as you can see, this subject isn't so straightforward, individual circumstances apply.



In saying all of this...... yes I agree with you, I was being smart, and for that I do apologise and hope you can accept that. I'm sorry

but I'm not apologising to that other twat who didn't even contribute to the thread
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  #71  
Old 08.12.2011, 11:47
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Re: buying a house: where to start?

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Great site, thanks Karl!

The beauty is you can turn the knobs until your side wins

Seriously, if house price growth and rental escalation over the long term drops from 2% p.a. to 1 % p.a., there is virtually nothing in it, financially. And that was my point. Of course, you'll first have to find a nice house that costs 620 000 CHF!

Don't forget to lower the property tax, it is much lower here than in the USA (something like half a percent here). Then if you hold rent increase and house value increase at the same percentage level, as inflation goes up, the house buyer wins progressively more and more...even starting at 1%.
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Old 08.12.2011, 11:49
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Re: buying a house: where to start?

the OP asked for where to start, not on the pros and cons of buying.

i guess the first thing is to find a house you like. this is probably the most difficult part. the second is finding a house you like, that you can afford. it's all downhill from then on.
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  #73  
Old 08.12.2011, 11:51
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Re: buying a house: where to start?

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Where do you reliably get 6% consistently? Honest disclosure, my stock portfolio is heavily focused on high dividend companies, but always eager to get some free advice
Think about it. If mortgages were really in your own best interest, why would the bank give you the money if they could make more by buying your house and renting it to you. Banks are not famous for their altruism. Neither are they stupid. So given the choice between buying a house with the bank's money and buying (part of) the bank with my own money, I'm all for buying the bank.
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  #74  
Old 08.12.2011, 11:54
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Re: buying a house: where to start?

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Questions about property are just like "Is 120Kchf enough to live on?",

God, this raises another question.........

Is 150k (the new 120k) enough to live and buy a house?

Right, just off for my lunchtime bagel..

(sorry......)
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  #75  
Old 08.12.2011, 12:06
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Re: buying a house: where to start?

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Think about it. If mortgages were really in your own best interest, why would the bank give you the money if they could make more by buying your house and renting it to you. Banks are not famous for their altruism. Neither are they stupid. So given the choice between buying a house with the bank's money and buying (part of) the bank with my own money, I'm all for buying the bank.
simple. they borrow money for next to nothing and sell it to you at a mark-up and this scales incredibly well and earns them lots of money. they lend only 80% to give them a safty buffer.

just think of the machinery that would be involved in having to hire people to look for properties, assess them, carry that 20% risk themselves, audit everything, check for fraud etc. etc.

for the same reason, in my company, we have lots of franchisees in some countries. sure we could lease the retail outlets ourselves and take the full margin, but a one-man/mom&pop outfit can do things cheaper than us, not least because when they take money for themselves, the don't have to worry about hiring people, having the HR infrastructure, having audits to prevent the staff hired from defrauding you etc. etc.
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  #76  
Old 08.12.2011, 12:07
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Re: buying a house: where to start?

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Think about it. If mortgages were really in your own best interest, why would the bank give you the money if they could make more by buying your house and renting it to you. Banks are not famous for their altruism. Neither are they stupid. So given the choice between buying a house with the bank's money and buying (part of) the bank with my own money, I'm all for buying the bank.
You could extend this argument to any business transaction and the result is we'd go back to the stone ages where people hunted for food themselves, cooked it themselves, built their own hut, etc. If there's something beneficial for both parties, why not enter into a transaction? Or would you prefer that nobody (including businesses) ever borrows money from a bank?
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  #77  
Old 08.12.2011, 12:12
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God, this raises another question.........

Is 150k (the new 120k) enough to live and buy a house?

Right, just off for my lunchtime bagel..

(sorry......)

WOOPS !!!!




Let's get this back on track !!!
  • The OP has her answers........ and an apology
  • Phil can assume the OP knows where a realestate agent and bank can be located.
  • The debate behind the mathmatics and economic sense of Swiss house ownership remains alive and well.
  • Auslšnders will remain second class citzens.... unless you earn over 150Kchf (the new 120Kchf)
So where were we?
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Old 08.12.2011, 12:32
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Re: buying a house: where to start?

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Don't forget to lower the property tax, it is much lower here than in the USA (something like half a percent here). Then if you hold rent increase and house value increase at the same percentage level, as inflation goes up, the house buyer wins progressively more and more...even starting at 1%.

Correct. The real risk for property as an investment is not inflation, but deflation, or more likely disinflation. When property values retreat or stay stagnant over long periods of time, it plays havoc with the investment case.
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  #79  
Old 08.12.2011, 12:34
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Re: buying a house: where to start?

The situation in (beautiful and wonderful) Cape Town (where my OH's family comes from) is however very different to the situation here, no?
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Old 08.12.2011, 12:47
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Re: buying a house: where to start?

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for the same reason, in my company, we have lots of franchisees in some countries. sure we could lease the retail outlets ourselves and take the full margin, but a one-man/mom&pop outfit can do things cheaper than us, not least because when they take money for themselves, the don't have to worry about hiring people, having the HR infrastructure, having audits to prevent the staff hired from defrauding you etc. etc.
Mom and Pop franchises are popular because many Moms and Pops suck at maths or build business cases on wildly optimistic assumptions. For example overtime is not charged for, insufficient money is put aside for pension funds.
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