Buy the place next door? wisdom or folly

Yes after discussion and thinking about all the very valid points being made in this thread - we will not go for the lot next door.

dbu:
Know any countries that are good for that? I see some adverts for investing in France on Youtube and there is a group in Zurich dedicated to property investment in the UK.

SteveDB:
You are right - we feel absolutely blessed to be in the position we are in.

Patron:
Yes that is kind of the winning argument. We want a balanced portfolio where real estate is a piece of the pie
 not 90% and same building kind of adds to that negative side.

If anyone has an answer to Wolverine’s question I would also be curious to know!

3 Likes

Buying overseas property with mortgage can have some benefits

Interest and loan are deducted from your swiss taxable income and wealth on a pro rata basis

There may be tax reliefs in the country where the property is meaning you don’t pay tax there eg in UK first 12k£ income are tax free

Overseas Rent and property value are not taxable in Switzerland. However they are considered to calculate your tax rate

Overall, if your properties are profitable you will likely still pay tax. Not to mention having to manage property overseas

Owning shares with low dividend payout is probably the simplest tax optimisation strategy for the average private investor in CH

3 Likes

Yes, one can buy an old property that needs renovations and you spread them out over a few years. Not free though because you’ll need money and mental energy to do the renovations.

6 Likes

I guess that is where the highest gain in RE can be done : buying an old place, making a full standard upgrade and resell/rent at a premium.

As you said, it is work. But from nothing comes nothing.

2 Likes

I do not have anything to add on the finance side but another drawback is the close proximity of the two units. In case the landlord lives literally next door as the tenants, if there is any issue with the rented unit it’s psychologically much more tempting for the tenants to come ring at your door to ask you to solve the said issue. Of course, as an owner you have responsibilities, no matter what distance separates you and your tenants, but the closer you are the less tenants would hesitate to ring you up even for something that falls outside of those responsibilities.

2 Likes