Go Back   English Forum Switzerland > Help & tips > Housing in general  
Reply
 
Thread Tools Display Modes
  #1  
Old 11.08.2016, 15:11
Banned
 
Join Date: Jul 2013
Location: Lausanne
Posts: 154
Groaned at 4 Times in 3 Posts
Thanked 24 Times in 15 Posts
20181216a has no particular reputation at present
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?).

Last edited by 20181216a; 11.08.2016 at 15:23.
Reply With Quote
  #2  
Old 11.08.2016, 15:15
bigblue2's Avatar
Forum Legend
 
Join Date: Mar 2009
Location: Glarus
Posts: 7,888
Groaned at 476 Times in 398 Posts
Thanked 13,679 Times in 5,445 Posts
bigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond repute
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
Reply With Quote
This user would like to thank bigblue2 for this useful post:
  #3  
Old 11.08.2016, 15:20
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 13,319
Groaned at 268 Times in 174 Posts
Thanked 15,733 Times in 6,682 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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.
Reply With Quote
  #4  
Old 11.08.2016, 15:24
Medea Fleecestealer's Avatar
Forum Legend
 
Join Date: Jul 2011
Location: Misery, but not the SoT one
Posts: 20,345
Groaned at 352 Times in 267 Posts
Thanked 14,796 Times in 8,507 Posts
Medea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond repute
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

Can one sell a mortgaged house?

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.
Reply With Quote
The following 2 users would like to thank Medea Fleecestealer for this useful post:
  #5  
Old 11.08.2016, 15:24
JagWaugh's Avatar
Forum Legend
 
Join Date: Apr 2009
Location: Eglisau
Posts: 7,480
Groaned at 47 Times in 46 Posts
Thanked 14,130 Times in 5,505 Posts
JagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond reputeJagWaugh has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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.
__________________
If everyone you know agrees with you consistently, they are either not listening, or not capable of critical thought.
Reply With Quote
The following 4 users would like to thank JagWaugh for this useful post:
  #6  
Old 11.08.2016, 15:27
Banned
 
Join Date: Jul 2013
Location: Lausanne
Posts: 154
Groaned at 4 Times in 3 Posts
Thanked 24 Times in 15 Posts
20181216a has no particular reputation at present
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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
Reply With Quote
  #7  
Old 11.08.2016, 15:30
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 13,319
Groaned at 268 Times in 174 Posts
Thanked 15,733 Times in 6,682 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
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
Reply With Quote
This user would like to thank Phil_MCR for this useful post:
  #8  
Old 11.08.2016, 15:34
Banned
 
Join Date: Jul 2013
Location: Lausanne
Posts: 154
Groaned at 4 Times in 3 Posts
Thanked 24 Times in 15 Posts
20181216a has no particular reputation at present
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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?
Reply With Quote
  #9  
Old 11.08.2016, 15:37
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 13,319
Groaned at 268 Times in 174 Posts
Thanked 15,733 Times in 6,682 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
+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
Reply With Quote
This user would like to thank Phil_MCR for this useful post:
  #10  
Old 11.08.2016, 16:14
Banned
 
Join Date: Jul 2013
Location: Lausanne
Posts: 154
Groaned at 4 Times in 3 Posts
Thanked 24 Times in 15 Posts
20181216a has no particular reputation at present
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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?
Reply With Quote
  #11  
Old 11.08.2016, 16:32
Medea Fleecestealer's Avatar
Forum Legend
 
Join Date: Jul 2011
Location: Misery, but not the SoT one
Posts: 20,345
Groaned at 352 Times in 267 Posts
Thanked 14,796 Times in 8,507 Posts
Medea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond reputeMedea Fleecestealer has a reputation beyond repute
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.
Reply With Quote
  #12  
Old 11.08.2016, 16:36
Banned
 
Join Date: Jul 2013
Location: Lausanne
Posts: 154
Groaned at 4 Times in 3 Posts
Thanked 24 Times in 15 Posts
20181216a has no particular reputation at present
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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?
Reply With Quote
  #13  
Old 11.08.2016, 16:38
bigblue2's Avatar
Forum Legend
 
Join Date: Mar 2009
Location: Glarus
Posts: 7,888
Groaned at 476 Times in 398 Posts
Thanked 13,679 Times in 5,445 Posts
bigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond reputebigblue2 has a reputation beyond repute
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
Reply With Quote
The following 4 users would like to thank bigblue2 for this useful post:
  #14  
Old 11.08.2016, 19:14
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
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:
View Post
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.
Reply With Quote
  #15  
Old 11.08.2016, 20:20
marton's Avatar
Forum Legend
 
Join Date: May 2008
Location: Kt. Zürich
Posts: 10,658
Groaned at 351 Times in 302 Posts
Thanked 13,860 Times in 7,625 Posts
marton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond reputemarton has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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?
Reply With Quote
  #16  
Old 11.08.2016, 23:53
Phil_MCR's Avatar
Forum Legend
 
Join Date: Oct 2009
Location: Basel
Posts: 13,319
Groaned at 268 Times in 174 Posts
Thanked 15,733 Times in 6,682 Posts
Phil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond reputePhil_MCR has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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.
Reply With Quote
  #17  
Old 12.08.2016, 01:32
Mrs. Doolittle's Avatar
Forum Legend
 
Join Date: May 2007
Location: Aargau
Posts: 5,926
Groaned at 119 Times in 86 Posts
Thanked 6,909 Times in 3,268 Posts
Mrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond reputeMrs. Doolittle has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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.
Reply With Quote
The following 2 users would like to thank Mrs. Doolittle for this useful post:
  #18  
Old 12.08.2016, 02:13
Forum Veteran
 
Join Date: Feb 2012
Location: CH
Posts: 2,304
Groaned at 87 Times in 73 Posts
Thanked 2,002 Times in 1,123 Posts
ivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond reputeivank has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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.
Reply With Quote
  #19  
Old 12.08.2016, 02:30
22 yards's Avatar
Only in moderation
 
Join Date: Jul 2009
Location: Basel-Land
Posts: 8,387
Groaned at 245 Times in 198 Posts
Thanked 15,619 Times in 6,460 Posts
22 yards has a reputation beyond repute22 yards has a reputation beyond repute22 yards has a reputation beyond repute22 yards has a reputation beyond repute22 yards has a reputation beyond repute22 yards has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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.
Reply With Quote
  #20  
Old 12.08.2016, 08:51
fatmanfilms's Avatar
Forum Legend
 
Join Date: Apr 2010
Location: Verbier
Posts: 17,915
Groaned at 285 Times in 234 Posts
Thanked 15,362 Times in 8,544 Posts
fatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond reputefatmanfilms has a reputation beyond repute
Re: Is it preferable to buy a house instead of renting one, even if you're not sure y

Quote:
View Post
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.
Reply With Quote
This user would like to thank fatmanfilms for this useful post:
Reply

Tags
buy house, housing, rent apartment




Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What is there to do if you're not interested in anything ? kittekat Daily life 69 27.03.2016 23:17
It may be a good time to buy into Swiss Francs if you're savings are in other currenc Horatio Gonzales Finance/banking/taxation 138 17.12.2015 17:54
Want to own a gun in Switzerland? Not if you're from one of these countries! Noth Swiss politics/news 43 29.01.2014 19:10
DON'T buy a rail ticket (if you're not 100% sure of the rules) Gav Complaints corner 85 10.09.2007 17:44
A big hello to all of you, especially if you're near Basel Basel Gooner Introductions 5 03.06.2007 22:20


All times are GMT +2. The time now is 01:17.


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