Investing in Real Estate abroad


If this is really the case then some day this madness has to end and then it will be the perfect moment to buy a house, if you have to (and activate that 2nd pillar).

By the way, UBS makes a nice Bubble Index report. According to it:

  • we are in the risk of a bubble
  • the price to rent ratio is at record high of 30 (3.3% yield)
  • the balanced price to rent ratio is regarded as 25 (4% yield)
  • in the previous bubble the sq meter price dropped from 6300 in 1989 to 4000 in 2000
  • adjusted for inflation, current average prices have reached the ones from 1989
  • the most exposed regions are around Zurich, Zug and Luzern


I’ve been to Malta recently and I think there should be something going on there. Lots of building coming up, estate agents looking for help, bar/restaurants/shops hiring like crazy. Maybe it’s a good place where to start buying a property. Isn’t there an ETF about buying properties there?


Hi everyone,

I’m starting to think about investing in real estate.

I lived most of my life in France but I’m Polish (seems like there are a lot of us here), and I was thinking of getting a 2 bedroom apartment in Kraków’s Old Town for something around CHF 100k.

The idea would be to get something nice, potentially for me at a later point in my life ( (early-)retirement, change in career, etc), that would ideally pay for itself through renting and maybe generate some revenue.

I don’t know how I would need to go about the financing.
From what I’m reading online, Swiss banks won’t offer me a mortgage for an apartment not in Switzerland.
Reading further I see some people advising to go to banks like BNP Polska with a 20-30% down payment.

What has been your experience?



If you’re earning in CHF, there should still be some Polish banks that would give you a CHF mortgage loan. After the CHF mortgage loan scandal it became more complicated to get one, but with a Swiss salary you should be able. The interest rate will be nowhere near as good as with Swiss banks though.


Yeah, I have to start a Polish corner on that forum. :slight_smile:

You can get a CHF mortgage in Poland from Polish bank. Interest rate will be higher than in Switzerland, but still it shouldn’t be bad. That’s what many people did few years ago when Swiss Frank was cheap (1 CHF - 3 PLN), and now they’re in trouble because it’s expensive (1 CHF - 4 PLN). But since you’re earning in CHF, the currency difference doesn’t affects you.


Thanks for the replies.
I thought that they had (almost) completely stopped giving CHF mortgages in Poland, some family and friends still have one.

The currency difference is actually better now in a sense, but who knows where it will go.

I’ll keep thinking about it during 2018 (while developing investments on IB, etc) and will potentially go ahead in 2019.



Dear Philippe, first, how much savings do you have in Switzerland? Do you have second/ third pillar or anything thereof? Pledge your Swiss holdings to your bank - combine all your holdings at ONE bank to improve your bargaining power/ money bazooka (your investment portfolio, your second and third pillar) - once the pledge is ready, borrow against your investment portfolio - take out a lombard-loan, short term advance for almost no interest (most banks charge around 1-1.5% p.a.), then use this as cash input as downpayment in Poland. A somewhat more sophisticated hack would be to pledge all your holdings to the same bank and then issue a letter of credit to your polish bank directly that will issue you the mortgage.
Either way, this is how you manage to keep all your current investment holdings AND you can get a cash downpayment for an apartment in Poland. Second step (you should figure this out before actually doing step 1): Find a local bank in Poland which is happy for a fellow Polish expat with purchasing power and good credit to get a mortgage even you don’t live there for now - in certain cases a signature of a relative living inside the country could help to make a mortgage happen, tell them about future business opportunities for them to open doors and let magic happen. Step 3: buy.

Recently wrote about this strategy in simplified form here:

All the best and have fun!


I read your blog post, and I admit, I read it with a lot of skepticism. Sure, banks would love you to “build your credit rating” by taking up credit cards and getting used to live off borrowed money.

What you describe as “money bazooka” is leverage. In my opinion leverage can be extremely risky. If the value of your collateral falls below the limit, the bank will need you to increase your pledge. I think, for a regular mustachian, a healthy advice would be: only invest what you own / can afford to lose.


Thank you Matt for the answer & interesting article. Some aspects might be more applicable for US/UK (I’m not sure if credit scores work the same here in Switzerland) but the general principals are interesting.

Regarding my case I should have the down payment in full by next year end. While I do hold Polish citizenship I’m not really a Polish expat so it might complicate things a little. I do have Polish family over there that could vouch for me.

Do we know if banks would pledge against stocks one has on IB/other brokers?


Why the hell would they? Transfer the stocks to them first and then they maybe would do it, I know ZKB does it, but would charge you a “custody” fee of like 0.3-0.4%. Or just borrow straight from IB on the margin.


Dear Bojack, thanks for your comments. The post should not encourage to live off borrowed money, but to use ones assets in order to have more financial firepower instead. Don’t spend it away, build wealth and use a credit-line tactically, short term, in order to take advantage of opportunities without selling your portfolio. We have used this strategy a couple of times. Leverage on the other side comes into play when you borrow against your holdings into more of the same, e.g. stocks. Or even worse, if you spend it and use it up. Don’t do that. Except you’re very, very knowledgeable and can stomach the vols.
Again, take the 2nd pillar many people have, this one is not volatile at all. Or a real estate here in Switzerland. If you pledge it to the bank as security (you can also do a partial pledge in case you expect vols) you can use these assets to have another shot at other wealth building opportunities.
Of course, it’s just an idea and maybe a very unconventional one for reqular mustachians.
Thanks for feedback again! Cheers


Just thought, if your 2nd pillar is CHF 150,000 or so, you could actually pledge it completely (2nd pillar has no vols and only goes up, slowly) and get a CHF 100,000 loan out to buy the house all in cash. This way you could also avoid the higher (?) interest rates in Poland. This would work.


You can only pledge or withdraw towards purchase of your own residence so that rules out investing abroad completely. Unless you move out of Switzerland in which case you withdraw (almost) everything too


Lately I have been seriously reconsidering investing in Real Estate in France, when I realized that some cities like Béziers were offering many opportunities like this one :

The ad is in French so I’ll explain the main features : this is a multi-units rental property consisting of 6 apartments and a commercial space on the ground floor. The building is for sale for 335kEUR, and the annual revenues from the rents is 40kEUR, so roughly 3333 EUR monthly. We are very close to the one percent rule! If this property can autofinance itself it would be perfect.

The pros :
-Regarding the financing, in France it is still possible if you have a very good financial condition (for example high salary and high savings and equity) to get a loan for the totality of the acquisition price of the building. With the current rates, and borrowing over 25 years, that would lead to a monthly mortgage reimbursement of 1550 EUR. Compared to the 3333 EUR of rent, this is quite good. It might be more difficult to get such a mortgage for a non resident, that is why i never closed all my accounts in France before going to Switzerland, so I could keep good relationships with local bankers.

The french taxes are really killing it:

  • First, a property tax (“taxe fonciere”) would have to be paid, I estimate it around 3-4kEUR per year. (so between 7 and 10% of the income)
  • Then, the french state would take 15.5% of social contributions on the rent (yes, even if i am not getting the benefits of the social system as a non resident), that would be 6000 EUR
  • Then we have the income tax, which cannot be less than 20% of the income for non residents. Once can perhaps deducts some expenses, but the final result is still not nice… I’d expect between 6000 and 7000 EUR of income tax.
    That makes already around 15kEUR of taxes out of the initial 40k EUR of revenues!

Then I have to take into account maintenance costs : a rule of thumb is 1% of the property value per year, so around 3500 EUR.

Then, since I will not be there managing everything by myself, I need to hire a managing company to handle tenants, clean the shared areas of the building and so on… usual prices are around 10% of the rent, so 4KEUR!

And at least, the mortgage reimbursement of 18600 EUR per year.

We can see that at in fact, this investment will not be (or in a very light way) cash flow positive.

And this is in the best case scenario! If anything goes wrong, I will have to put more money in it, with a high opportunity cost (I could have put this money in the stock market).

For instance, if a tenant won’t pay the rent, french law are very much against the owner, so I’d have to wait on average 18 months to get him out…

So all in all, even if the initial ad was very yummy, a back of the enveloppe calculus makes me think that it is not that good at all, particularly because of french taxes and tenant friendly laws…


Hmmm. I thought with the newer rules you don’t pay that when living abroad, or is that only for non-French citizens? I don’t remember paying this for our French properties.

Of course, maintenance is deductible from the taxes (not fonciere, though).

For property management, we pay 5% + TVA which makes it a net 6%; they also take 6% out of the ‘charges’. That last part is rather fuzzy in the contract, make sure you clear that up before investing.

For the last person that didn’t pay, it took six months. But, the French system is somewhat cushioned in the sense that many of the people at financial risk get supported by the CAF, or similar instances with acronyms I always forget. For many of the apartments we rent, between half and two thirds of the rent is actually guaranteed by the state. Nowadays, the CAF even transfers directly to our account (or these days our ‘agence’). That means that even for the the person we had to kick out, we received most of the rent each month.

We have been playing it save, in the sense that ‘guaranteed’ income covers our monthly mortgage payments.

With regards to the property you are considering buying; I’d be cautious with regards tot he commercial space. I’ve looked into investing into commercial RE in France and elsewhere, but whereas potential ROI is higher, so are the risks.


Hi all,

I’m currently evaluating the possibility of investing in real estate in the USA (i.e. buying a rental property in Florida) which seem to have “decent” ROI.

Doing some research I’ve read that the best option is to open a LLC, through which buy the property and then handle the cash flow (rental payments from tenants, management expenses etc.).

As I don’t have any local connection, I would have the property administered through a management company.

So, before going deeper with this option, I would like to know if someone has experience on it.

Especially regarding taxes: the profits from the LLC would be declared and taxed in the US (paperwork would be done through a local accountant).
What about taxation here in CH ? Do you know how would it work ? Would I have to pay some tax difference or would I be taxed twice ?

About financing: as getting a mortgage there seems to be difficult and the same here (on a property located abroad) I was thinking about lending cash on margin from IB (current rate for CHF is 1.5%) and use it as a mortgage, thus yearly reducing the debt with the rental payments. Any thoughts about this option ?

All suggestions would be really appreciated ! :blush:


I have no clue.
but the fact that the real estate is that far away, you can not just easily show up/ intervene/ check on things, you do business with something outside of your control. Someone could just claim arbitrary stuff and it would take you decent effort to just find out if this is true or not. I for myself regard this as big no-go.


I understand it and would for sure not consider the option if I had to do it by myself or without support. Anyway I think I’d be relatively safe having the property administered by a professional property management (whose services are paid for), which would also provide monthly statements with details of rental payments, expenses etc.


As for now Polish banks don’t offer CHF mortgage if you earn in CHF. The only acceptable currencies are USD/EUR/GBP.


I would make sure your property is not at (current) sea levels, as there’s a good chance they’ll be raising in the next decades.[quote=“Bojack, post:17, topic:475”]
US property tax is often close to 3%. The Swiss wealth tax is something like 0.1%?

But Switzerland (well, let’s say Zurich, which I know) taxes you also on Eigenmietwert, a sort of imputed income which the property could generate, which you have to pay even if you don’t rent it out. This is added to your income and taxed accordingly. In my case is around 1.5% of the price I paid for the house I own and live in.