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Old 28.12.2020, 19:11
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Buying a house with appt+studio and renting out studio

Hi All,
I have visited a for sale "single family" house which also has in it a small apartment/studio with kitchen and bath. The studio was used by the current owner's relative when the owner was living in the main part of the house and they used the main/common entrance and staircase to reach the studio.

But the studio can also be accessed from a fully independent door from the outside. Reaching the studio from the independent door currently is not comfortable/safe since the stairs were not designed to be a main entrance, but it could be changed relatively easily.

The agent mentioned that the studio could be rented, pending approval from the commune and improving the access thru the independent door.
I suspect the agent might just be trying to up-sell it with the potential rental income.
I would be interested in buying the house as a primary residence with 80% mortgage and using 2n pillar too. Being able to rent the studio would lighten the load.
Considering it would be a mortgaged property and using some 2nd pillar too, would this be allowed by the bank and 2nd pillar?

Does anyone has experience with this type of situation?

I searched for this topic, but there are no answers although the question has been asked in various other forms.

thanks!
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Old 28.12.2020, 19:28
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Re: Buying a house with appt+studio and renting out studio

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Hi All,
I have visited a for sale "single family" house which also has in it a small apartment/studio with kitchen and bath. The studio was used by the current owner's relative when the owner was living in the main part of the house and they used the main/common entrance and staircase to reach the studio.

But the studio can also be accessed from a fully independent door from the outside. Reaching the studio from the independent door currently is not comfortable/safe since the stairs were not designed to be a main entrance, but it could be changed relatively easily.

The agent mentioned that the studio could be rented, pending approval from the commune and improving the access thru the independent door.
I suspect the agent might just be trying to up-sell it with the potential rental income.
I would be interested in buying the house as a primary residence with 80% mortgage and using 2n pillar too. Being able to rent the studio would lighten the load.
Considering it would be a mortgaged property and using some 2nd pillar too, would this be allowed by the bank and 2nd pillar?

Does anyone has experience with this type of situation?

I searched for this topic, but there are no answers although the question has been asked in various other forms.

thanks!

Best to ask the bank who will give you mortgage... Also, I don't know what permit do your have but as far as I know a B permit owner isn't allowed to have a property that is rented out... saying that, in your case it's the same property...
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Old 28.12.2020, 21:27
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Re: Buying a house with appt+studio and renting out studio

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Hi All,
I have visited a for sale "single family" house which also has in it a small apartment/studio with kitchen and bath. The studio was used by the current owner's relative when the owner was living in the main part of the house and they used the main/common entrance and staircase to reach the studio.

But the studio can also be accessed from a fully independent door from the outside. Reaching the studio from the independent door currently is not comfortable/safe since the stairs were not designed to be a main entrance, but it could be changed relatively easily.

The agent mentioned that the studio could be rented, pending approval from the commune and improving the access thru the independent door.
I suspect the agent might just be trying to up-sell it with the potential rental income.
I would be interested in buying the house as a primary residence with 80% mortgage and using 2n pillar too. Being able to rent the studio would lighten the load.
Considering it would be a mortgaged property and using some 2nd pillar too, would this be allowed by the bank and 2nd pillar?

Does anyone has experience with this type of situation?

I searched for this topic, but there are no answers although the question has been asked in various other forms.

thanks!
A normal mortgage is for your private use, not commercial use, same for using pension funds.
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Old 28.12.2020, 22:24
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Re: Buying a house with appt+studio and renting out studio

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A normal mortgage is for your private use, not commercial use, same for using pension funds.
Agree, but why would the bank be against me renting the studio if it improves my risk profile by having some potential rental income. The bank’s financing decision is based on my salary and my funds, without taking any rent into consideration. So why the rental income would not be a considered as bonus by the bank too?
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Old 28.12.2020, 22:45
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Re: Buying a house with appt+studio and renting out studio

If you are talking about lightening the load when mortgage rates are 1% and lower and affordability is based on interest rates at 5%, are you sure you are going to meet the bank’s criteria. At current rates the mortgage should almost be an irrelevance for your cashflow.
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Old 28.12.2020, 23:29
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Re: Buying a house with appt+studio and renting out studio

If you are talking about lightening the load when mortgage rates are 1% and lower and affordability is based on interest rates at 5%, are you sure you are going to meet the bank’s criteria. At current rates the mortgage should almost be an irrelevance for your cashflow.



By that logic, a millionaire should not be working since he is rich enough??
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Old 28.12.2020, 23:57
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Re: Buying a house with appt+studio and renting out studio

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If you are talking about lightening the load when mortgage rates are 1% and lower and affordability is based on interest rates at 5%, are you sure you are going to meet the bank’s criteria. At current rates the mortgage should almost be an irrelevance for your cashflow.



By that logic, a millionaire should not be working since he is rich enough??
Absolutely.

Although you got the gist of life you didn't get the logic.
If someone struggles with a mortgage these days what will they do when they go up? (Some bankers still cling to the idea that all interests will go back up again )
However, greetings from the US-2008.

OP, what you're mentioning is an "Einliegerwohnung". Rules might be different (in your favour) for those. As someone said: Ask you bank.
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Old 29.12.2020, 06:54
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Re: Buying a house with appt+studio and renting out studio

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Hi All,
I have visited a for sale "single family" house which also has in it a small apartment/studio with kitchen and bath. The studio was used by the current owner's relative when the owner was living in the main part of the house and they used the main/common entrance and staircase to reach the studio.

But the studio can also be accessed from a fully independent door from the outside. Reaching the studio from the independent door currently is not comfortable/safe since the stairs were not designed to be a main entrance, but it could be changed relatively easily.

The agent mentioned that the studio could be rented, pending approval from the commune and improving the access thru the independent door.
I suspect the agent might just be trying to up-sell it with the potential rental income.
I would be interested in buying the house as a primary residence with 80% mortgage and using 2n pillar too. Being able to rent the studio would lighten the load.
Considering it would be a mortgaged property and using some 2nd pillar too, would this be allowed by the bank and 2nd pillar?

Does anyone has experience with this type of situation?

I searched for this topic, but there are no answers although the question has been asked in various other forms.

thanks!
I bought a property like this. I was led to believe that the 2nd pillar wasn't a problem but don't know for sure as I didn't use this option in the end.

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Best to ask the bank who will give you mortgage... Also, I don't know what permit do your have but as far as I know a B permit owner isn't allowed to have a property that is rented out... saying that, in your case it's the same property...
For EU B it is not a problem.
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Old 29.12.2020, 08:01
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Re: Buying a house with appt+studio and renting out studio

Yes, I fully meet the financing requirements of the bank at 5%. The potential extra rental income from the studio would still be welcome. And since it has a private entrance it would not compromise my quality of living in the house.

Renting the studio would be beneficial for me and would also help with the housing shortage . Why let it sit empty?
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Old 29.12.2020, 08:28
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Re: Buying a house with appt+studio and renting out studio

Rather than improve the interior door, you should be thinking the opposite. i.e. to give a potential tenant privacy and yourself security.

I think you need to ask the commune about the local laws. Using it as a granny-flat (ie for family members) was probably the original intent. Renting it out is different.

But be prepared that tenants looking for a studio will likely be students, young adults and single male refugees*. Their lifestyle may differ from yours and turnover could be fairly high.

* This is not intended as a slight, our family supports refugees in the la Côte region.
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Old 29.12.2020, 08:50
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Re: Buying a house with appt+studio and renting out studio

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Rather than improve the interior door, you should be thinking the opposite. i.e. to give a potential tenant privacy and yourself security.
OP said to improve the independent door - so it is safe and more appropriate as a main door for the flat.

I would change the internal door to be a double one like you often get in adjoining rooms in hotels - two doors back-to-back and lockable from their own side, which gives two-way security and better soundproofing.
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Old 29.12.2020, 08:57
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Re: Buying a house with appt+studio and renting out studio

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Hi All,


The agent mentioned that the studio could be rented, pending approval from the commune and improving the access thru the independent door.
I suspect the agent might just be trying to up-sell it with the potential rental income.
I would be interested in buying the house as a primary residence with 80% mortgage and using 2n pillar too. Being able to rent the studio would lighten the load.
Considering it would be a mortgaged property and using some 2nd pillar too, would this be allowed by the bank and 2nd pillar?

Does anyone has experience with this type of situation?

thanks!
Couple of weeks ago I was at the bank discussing a situation along the lines with the banker (in my case house had been 'expanded', and the reforms were missing a couple of 'commune permits' (which, in any other country would be just paper shuffling, as they were not of structural or externally visible impact.
The first wall you will encounter in the bank is the paperwork. Nothing will be considered without prior documentation for "approval from the commune". The bank will not consider the 'benefit of rental of the studio', or the additional 'independent entrance" as long as they don't have all of the official approvals for it (request for conversion, acceptance of conversion, transformation of living space, acceptance of independent unit) - it is different to have a family member living with you (for free), than transforming the space in two independent dwelling areas. As such, they will value the property as one unit. Any other legal considerations (buy to rent with a B permit etc) will also be mentioned. Basically, they will put all of the 'buts' before the mortgage is granted, or they will value the property at pure face value - so mortgage might not be as high as asking price, if you cannot rip off the benefits of this additional feature.

best of luck

Cheers
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Old 29.12.2020, 08:59
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Re: Buying a house with appt+studio and renting out studio

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For EU B it is not a problem.
The Op’s profile says he’s an American.
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Old 29.12.2020, 09:13
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Re: Buying a house with appt+studio and renting out studio

Frankly, I wouldn’t want to be involved in all the faff and agro of finding and dealing with tenants- they can be a total PITA...
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Old 29.12.2020, 09:56
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Re: Buying a house with appt+studio and renting out studio

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The bank will not consider the 'benefit of rental of the studio', or the additional 'independent entrance" as long as they don't have all of the official approvals for it
Thanks for sharing your experience. I don't want or need the bank to consider the potential rental income for the financing.

I am just wondering if they would object to renting the studio since they did not lend me the money for "commercial" purposes.

It makes sense that the commune will have to approve the "official" division.

Sounds like I would need approval from the commune, bank, and 2nd pillier too.

I have a C permit.
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Old 29.12.2020, 10:15
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Re: Buying a house with appt+studio and renting out studio

I can't help but think this is all being "over-complicated". The bank really couldn't care less if you rent out the studio or not. Don't even mention it to them, just apply and get your mortgage. No reason at all the commune should not allow you to rent it out. If there are no major changes to the exterior entrance and it's just needs fixing up they don't even need to be informed.


As for being a B permit holder, I don't know how this would effect you, but if you own the property I believe (from memory) you can only rent it out for 9 months a year. An English friend of mine bought a property with a view to renting it and he had this restriction placed on him.
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Old 29.12.2020, 10:39
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Re: Buying a house with appt+studio and renting out studio

Maybe the bank does not care since it does not affect them negatively, but the commune would want to know and approve it since the renter will have to register with the them.

There would be no external modifications. Just a new solid/safe staircase is needed from the independent back entrance.
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Old 29.12.2020, 11:19
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Re: Buying a house with appt+studio and renting out studio

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A normal mortgage is for your private use, not commercial use,
In the event that a part of the property is your primary residence banks are quite prepared to give a mortgage rate based on that, regardless of how many extra rentable rooms there may be.

We had this exact experience buying our chalet here - initial quotes from one bank were quoting a much higher interest rate than another, so we queried it, to be told that this was normal for (as they'd assumed) properties bought for commercial use.

Once we clarified that we would be living in, and classing as our primary residence, one of the six separate apartments in the house they were more than happy to drop the rate to the normal residential one.

So, OP, you need to make sure the bank knows that this is indeed your primary residence, and from my experience they won't be even slightly concerned that part of the property is also rented out.
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Old 29.12.2020, 15:15
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Re: Buying a house with appt+studio and renting out studio

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but the commune would want to know and approve it since the renter will have to register with the them.
If it's a separate studio, the only time the commune would know is when someone registers as living there.

We had a similar thing with a house we once owned. It had a separate granny flat joined to the main house but with its own entrance. We blocked off the door in the passage linking to the house and happily rented it out. In all our contracts we state it is the responsibility of the tenant to announce himself to the commune so we don't get involved in that.

Anyway, good luck with it all, and I'm sure it will all work out fine.
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Old 29.12.2020, 19:57
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Re: Buying a house with appt+studio and renting out studio

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If it's a separate studio, the only time the commune would know is when someone registers as living there.
The studio is part of the main house and has a separate entrance (too) which is not ideally configured since it was used as a "granny flat" with access from the main house.

I thought it is a requirement that all new renting residents register with the commune. So the commune will know either from us or from the renter that we are renting (the studio) under the the same address. I would imagine we would even have to apply for a mailbox with the post. (We live in a house with 4 appt. now and the address is the same for every appt, but all have a separate mailbox.


In your case the commune never asked you a question, did you have two mailboxes?
Maybe I'm over-complicating it, but i don't want big surprises later on.


Thanks for sharing your experience.
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