English Forum Switzerland

English Forum Switzerland (https://www.englishforum.ch/forum.php)
-   Housing in general (https://www.englishforum.ch/housing-general/)
-   -   Is it preferable to buy a house instead of renting one, even if you're not sure you'l (https://www.englishforum.ch/housing-general/258129-preferable-buy-house-instead-renting-one-even-if-you-re-not-sure-you-l.html)

20181216a 11.08.2016 15:11

Is it preferable to buy a house instead of renting one, even if you're not sure you'l
 
Hi,

If we have allocated X francs per month for housing, is it preferable to buy a house with exact same X francs mortgage than to buy? What are the trade-offs? What will happen when we decide to leave CH?
Thanks

P.S. Suppose I have enough money for the 20% equity(right term?).

bigblue2 11.08.2016 15:15

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
the 20% deposit for a start, and then trying to sell it when you leave

Phil_MCR 11.08.2016 15:20

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by ghasemi (Post 2637269)
Hi,

If we have allocated X francs per month for housing, is it preferable to buy a house with exact same X francs mortgage than to buy? What are the trade-offs? What will happen when we decide to leave CH?
Thanks

No.

Medea Fleecestealer 11.08.2016 15:24

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
As you've already had a partial answer here

http://www.englishforum.ch/housing-g...ged-house.html

I can't really see why you're asking again.

But short answer - unless you plan to stay in Switzerland long term then rent rather than buy.

JagWaugh 11.08.2016 15:24

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by ghasemi (Post 2637269)
Hi,

If we have allocated X francs per month for housing, is it preferable to buy a house with exact same X francs mortgage than to buy? What are the trade-offs? What will happen when we decide to leave CH?
Thanks

If you're only spending 10CHF/month to rent I would stay with that. Try and sign a 99 year contract, even if you have to go all the way to 100CHF/month.


Long term, I would say buy. But if your definition of long term is shorter than Grundstückgewinnsteuer is, then probably rent. The only way to judge is to find a concrete place, and do some math. Calculate the situation for every 5 years up to 30 and look at how the numbers work out. If it turns out that you are even (vs renting) from say 10 years on then decide if you can commit to staying at least 10 years. Look at all the factors, go to the bank and ask them to help.

20181216a 11.08.2016 15:27

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by Medea Fleecestealer (Post 2637284)
I can't really see why you're asking again.

It will be easier in the future for people seeking answers to such questions.
+ Clearer answers to knowledgeable dumb people like me

Phil_MCR 11.08.2016 15:30

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
you can buy if the mortgage rate + 6% is less than what you can rent the house for.

e.g. your question mortgage = rent, then x% + 6% > x% => no buy

mortgage 2% and rent 10%, then 2% + 6% < 10% => ok to buy*

*assuming other factors are met

20181216a 11.08.2016 15:34

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by Phil_MCR (Post 2637289)
you can buy if the mortgage rate + 6% is less than what you can rent the house for.

e.g. your question mortgage = rent, then x% + 6% > x% => no buy

mortgage 2% and rent 10%, then 2% + 6% < 10% => ok to buy*

*assuming other factors are met

+6% of what? So 2000 CHF mortgage is equivalent to 2120 CHF rent?

Phil_MCR 11.08.2016 15:37

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by ghasemi (Post 2637293)
+6% of what? So 2000 CHF mortgage is equivalent to 2120 CHF rent?

all percentages are percentage of house purchase price

e.g house costs 800k, then

2% of 800k is 16k per year or 1'333 per month

ok to buy if house can be rented for 2%+6% per year = 64k, or 5'333 per month

20181216a 11.08.2016 16:14

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by Phil_MCR (Post 2637297)
all percentages are percentage of house purchase price

e.g house costs 800k, then

2% of 800k is 16k per year or 1'333 per month

ok to buy if house can be rented for 2%+6% per year = 64k, or 5'333 per month

Is yearly rent always 10% of the value of the house?

Medea Fleecestealer 11.08.2016 16:32

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
If you're not on a C permit you can't rent the property out anyway. As a B permit holder it has to be your main residence.

20181216a 11.08.2016 16:36

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by Medea Fleecestealer (Post 2637332)
If you're not on a C permit you can't rent the property out anyway. As a B permit holder it has to be your main residence.

I know. How does it affect the question?

bigblue2 11.08.2016 16:38

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
well if you leave and you can't sell it, you also can't rent it, so it'll be sat empty but be costing you

ivank 11.08.2016 19:14

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

If we have allocated X francs per month for housing, is it preferable to buy a house with exact same X francs mortgage than to buy? What are the trade-offs? What will happen when we decide to leave CH?
Mortgage is only a small part of the costs. In my personal situation (your mileage may vary!), it's only about a third of apartment's costs. The other two third are Nebenkosten and tax. And then there are varying maintenance/renovations costs as needed and amortization. But it'ss still significantly cheaper than renting an equivalent apartment.

Quote:

Originally Posted by Medea Fleecestealer (Post 2637332)
If you're not on a C permit you can't rent the property out anyway. As a B permit holder it has to be your main residence.

Not true. With non-EU L/B indeed you'll have to make the property your primary residence after buying (the notary will put such a clause into your contract). But nothing really prevents you from renting it out later if you have to move elsewhere even within Switzerland. You shouldn't though rent it out too soon after buying, authorities may find that as an attempt to circumvent the law. And EU citizens resident in CH are not restricted in any way in what they can buy.

marton 11.08.2016 20:20

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by Phil_MCR (Post 2637289)
you can buy if the mortgage rate + 6% is less than what you can rent the house for.

e.g. your question mortgage = rent, then x% + 6% > x% => no buy

mortgage 2% and rent 10%, then 2% + 6% < 10% => ok to buy*

*assuming other factors are met

Does this account for your loss of income from the deposit? Although you could argue in these negative rate times that having your money either in an account or invested in a house is a wash?

Phil_MCR 11.08.2016 23:53

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by marton (Post 2637441)
Does this account for your loss of income from the deposit? Although you could argue in these negative rate times that having your money either in an account or invested in a house is a wash?

assume 100% mortgage to take deposit out of the calculation.

Mrs. Doolittle 12.08.2016 01:32

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by ghasemi (Post 2637269)
Hi,

If we have allocated X francs per month for housing, is it preferable to buy a house with exact same X francs mortgage than to buy? What are the trade-offs? What will happen when we decide to leave CH?
Thanks

P.S. Suppose I have enough money for the 20% equity(right term?).

If you are already thinking of leaving, don't buy. Seriously. Renting gives you flexibility. Of course, there are exceptions. It is not uncommon to find house rentals with a minimum lease period which can be 3 to 5 years.

ivank 12.08.2016 02:13

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by Phil_MCR (Post 2637289)
you can buy if the mortgage rate + 6% is less than what you can rent the house for.

What's the 6% for?

Anyway that's a very pessimistic equation, you'd never buy anything in Switzerland deciding like that. The yields are just too low. Currently maybe 4-5%, but also historically, judging from rent and price indexes, they weren't much better, yet the mortgage rates were a lot higher in the past.

22 yards 12.08.2016 02:30

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by ivank (Post 2637558)
What's the 6% for?

Yes, Phil, what's the 6% for? Banks calculate affordability on the basis of a hypothetical 5% p.a. interest rate (not {actual interest rate +5%}).

But if your 6% is some sort of RoI target, it's a bit arbitrary, and in any case there's a lot more to owning your own home than purely financial considerations.

fatmanfilms 12.08.2016 08:51

Re: Is it preferable to buy a house instead of renting one, even if you're not sure y
 
Quote:

Originally Posted by bigblue2 (Post 2637339)
well if you leave and you can't sell it, you also can't rent it, so it'll be sat empty but be costing you



That's not true, as once you give up your B permit your no longer a B permit holder.

If you used your pension fund for the deposit that will have to be repaid when you leave CH as its no longer your main residence.


All times are GMT +2. The time now is 07:39.

Powered by vBulletin® Version 3.8.4
Copyright ©2000 - 2019, Jelsoft Enterprises Ltd.
LinkBacks Enabled by vBSEO 3.1.0