Hello to all the Mustachian community !
Let’s depict the case
We live in the countryside, but with all the necessary commodities, transports, school, also 10 minutes from city and the lake, etc…
and are lucky to have been able to buy a 4.5 room apartment in 2017 at 500kCHF, including 400kCHF of loan renegotiated at the rate of around 1% until 2028.
It is in a small condominium with 3 other apartments, and we are on the ground floor with a 150m2 exterior.
Currently, one room is dedicated to friends and also home office. But we could imagine use the parental room with a small desk for home office.
The family has grown and we think it’s not over… and we are wondering about buying a 5.5 room villa with a budget of around 1’000kCHF.
In your opinion, is this a good idea? is it the right time?
Our current apartment has gain in value (+50%~) but we weren’t particularly thinking about selling it for the next project, what do you think of that? Keep or Sell ?
I know that selling ot will allow to keep 400k at an interesting rate for our next project… but what about renting it…
Opening: everything is perfect in Switzerland. Besides, we should have nationality this year. However, we were wondering about becoming a border commuter to Geneva. Both our parents are there, but we don’t feel that the region and life in France is “sexy” enough to make this change… what do you think?
We just thought it would be easier for real estate because there are more offers
Thanks for your feedback
A very nice day to all !
Hi, if you are looking for a general discussion about the housing market and buy vs rent there are quite a few existing threads for example why would 3% interest increase jeapordise so many real estate loans
If you want advice on a specific project it might help if you shared some specifics like price and likely rent, I am sure people will be keen to help
It is impossible to answer this question as in “is it the right time to buy stocks”.
In comparison to stocks you can do some math and see, if it makes sense from the tax and economic perspective.
Maybe you can try to rent the current property out? If the property is self-sustaining, this could be an option, to finance another property.
I have a similar case a year ago so I can explain a bit my experience
We own an apartment 5.5 and we move to another area (to reduce work commuting), not relevant but we rent the new apartment and not bought a second one. (Be aware that you need to bring 30% instead if 20%) that means that you need to have 300k in cash. (not sure if as become your primary residence the rule change)
We decide to rent it to ensure at least10 years of ownership (taxes related).
The first year has been negative overall(only for few hundreds), we have not invest almost nothing on the apartment before and we need to replace, fix stuff before and in addition we had a quite demanding tenants that ask for a lot of things.
Financially (there are some threads on the forum with the formulas…)
you need to calculate if it makes sense as investment vehicle. I calculate mine based on the return of investments based on the initial capital (ignoring the property value)
Main challenge is that we use whatsapp as a main communication channel and there they expect you to be 24/7 so it was quite stressful.
So we try this year (as they move out) with a fully manage service (it should decrease the revenue but you do not waste time to deal with your tenants.