I have been living in Switzerland for more than 3 years, but I am Italian. Where I come from in Italy we have a house with my parents (I am an only child) which is located in a building where we are the only ones and 2 commercial premises below (about 200 m2) of which one is already rented, while the other would be to rent.
We have been presented with a proposal in which we can buy everything and therefore have the building just for us and thus also be able to arrange the prospectus in order to revalue everything.
However, this means that I have to pay out a large sum immediately which would take away almost 2/3 of my liquidity which I keep as a buffer account. Furthermore, to recover everything I would have to slightly reduce my monthly investments in VT and I would be somewhat sorry for this since we are in an interesting period of accumulation with relatively low prices compared to the previous ones. But in the end this is an investment itself, it would be my first real estate investment, because with the income from the purchases we would pay the mortgage and there is the possibility that something (divided by 3 would be almost negligible) will come in every month. Do you think this is a good way to start? I don’t know if it’s possible to talk about figures because I understand that this is a bit volatile as a speech. Furthermore, there are perhaps those who have more experience with these properties abroad, in the sense that they advised me that living in Switzerland I should only have the bare ownership in my name while leaving the usufruct to my parents, so as not to have to pay expenses here. Then there is the mortgage factor, they would do it in € with a fixed rate of around 4% directly there, is there any convenience or better rate that would justify a mortgage made here by me? If so, could you request € directly?
Thank you. For any question please ask me. I also discovered that in Italy, the state requires 9% tax for a commercial venue, which is a large non-repayable sum…
This investment seemed emotional.
Is it A good financial investment or is the valuation overpriced?
If you have to rent the commercial unit what will be the net return ?
There is certainly an “emotional part” having grown up in that place and wanting to revalue it. However, having made some evaluations in theory, the actual value is around 220-240k according to our architect, while we would buy it for 180k + 19-20k in taxes and notary.
With a monthly return of €800 from a room already rented until 2027 (never left vacant because it’s a well-known place) and around €600-800 from the other place for which we have to look for a tenant. The mortgage should come to €1,300 a month, I think. Furthermore, the future idea could be to make it entirely a commercial space (my parents would go to live in another house of ours) with the possibility of setting up a small clinic by renting the rooms to various professionals (I myself could occasionally use them with my work every month). But they are all bets and very long-term things 5-10 years.
One thought came to my mind: what does the regulatory environment look like for home owners in that specific location? Wandering Investor has recently educated us about French laws pushing home owners to better energy efficiency. This could be a future cost for you. Typically in Switzerland, banks calculate 1% of home value as maintenance and upgrade costs.
Offer accepted, now we move on to the mortgage and the down payment.
Does anyone who owns property outside Switzerland know if there is a way to be subject to less tax? Someone told me to put the bare ownership in my name and leave the usufruct to my parents, so as not to have any revenue. Could this work?