You’d for sure be taxeble in Switzerland over the value of the property. Not too much currently, with a value below 10k, but if (when!) prices go up it might be of importance.
Yes that for sure. So even a double tax agreement between Switzerland and Bosnia to read
I own a plot in USA and every year I have to pay about USD 500 property taxes and association fees to the community that it is part of. So check for that, and if you have any obligation to maintain the land eg. landscaping, grass cutting
500 Sqm would be enough for a 3-4 bed normal house with decent garden. Since you are on a Mustachian forum I assume that is fine but just mentioning it since if you want to return from CH and build something bling it is not that big
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I have piled up some cash, a bit less than 200K CHF, I would like to invest this cash out of stocks, and considering real estate. As the yield in CH RE yield looks very low, and I am thinking about buying a flat abroad.
Also in this tread was commented that an abroad owned flat does not count for CH wealth tax, nor its renting is taxed as CH income. So this is another advantage.
Do you have in mind any European country with a good renting yield and low taxes on renting income?
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This is at best inaccurate. You do pay taxes on the rent you charge, but you can deduct taxes paid to the foreign state. As for the wealth tax I am not sure, but I think the value of the property is used to compute your tax rate on your income taxes.
I thought foreign sourced real estate income was usually only taxed where the property is situated (though might depend on DTA?). For Swiss taxes, doesn’t it only impact the tax rate?
Perhaps I am confused. Will try to simulate when I do the 2022 taxes, in November :).
See posts above. Also Link to canton Geneva guidance on the topic of taxes on property income and wealth
Translated:
“If your property is located:
- in the canton of Geneva: it is taxed in the same way as your other elements of wealth and income, and it is also subject to additional real estate tax;
- in another canton: its tax value and income are used to set your tax scale for cantonal and municipal taxes (ICC), and its income is added to your taxable income for direct federal tax (IFD) if you are domiciled in Geneva;
- abroad: it is not taxed in Geneva, but its tax value and income are used to set your tax scale.”
Same must presumably apply in other cantons otherwise there would be a mess deciding who taxes what
What do you define as good?
A rule of thumb is don’t buy property as a leveraged investment unless net rental yield after maintenance & vacancies is >5% which is approximately the average interest rate historically
Property prices are falling or stagnating and rents are increasing. But I don’t think we are much over 5% in many places in Western Europe yet
Interested to read other folks views
I am not RE expert, these are just my ideas.
Prob I am too optimistic, but by good I would say >7% net yield without leverage. The compensation should be higher for the risk and uncertainty of buying a flat abroad in an non well known country (at least for me).
Normally smaller flats in working areas around big cities used to have higher renting yield. The kind of flat that young couples, immigrants or family non high salaries would rent. Who would like to live in this flats doesn’t use to have in cash the 25% money upfront for opening a mortgage, so there are more people willing to rent this kind of flats that buying them. Also these flats have lower prices, so they could be bought all in cash without leverage for someone who earns in CHF.
If you can afford to buy a 100-200k flat all in cash with no leverage, the fact that the interest rates go up, it is a good thing. Less people are willing to buy them and prices should go down.
10 years ago I spend some time in Estonia and Poland. I believe since them these two countries have grown a lot. What are the countries that are gonna grow a lot in next decade?
A good investment would be getting a good renting yield, and speculate buying in a area that will grow in future. So in case you would like to cash out you get also a nice yield.
paging @Bojack and other Poles for Wroclaw along this piece of news:
I’ve read somewhere (CS RE report maybe?) about a year ago that valuations in Wroclaw are very much on the lower end of the bubble graph.
- add all the UA/BY refugees and IT worker migrants, who might never go back (and their kids, etc)
- add the slow progressing of residence permits (currently over 12 months)
- add the university in the city + closeness to German and Czech + Ryanair serving the local airport
It seems like a good enough RE pitch for me for the next 5+ years.
Where do I start searching for oppties and is the RE market ripe enough in Wroclaw to buy some properties to let with some companies to manage it as well?
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If you ever need to check up on your properties, Swiss has a direct flight to Wroclaw. It’s also has a very pretty old town with islands and stuff.
Yes I know 
been there, have a team there that I work with.
So what do you think of starting to look at apartments there? 35-45sqm is about 100k CHF (500k PLN) and it goes up from there.
What I’m mostly interested is the legal background (taxation, etc). Can you help there?
Hey, I was studying and living there for a few years afterwards. Have an apartment there too, but I know nothing about formalities/procedures required for foreigners to buy real estate (if there are any?). But in case you have some specific questions, feel free to ask me. However, Wroclaw is changing a lot so maybe even your team mates will be able to help you better (eg. to assess if the location is good etc.).
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If you count UK as european country: I just bought a flat in the UK to diversify my real estate portfolio as i’m only invested in Switzerland for now. Here are some numbers:
-
Purchase price: £187’950
-
Furniture pack £15’000 (Free)
-
Funds: £61’385
-
Mortgage: £126’565
-
First year assured rent (6%) £11’277*
-
Rent year 2: £13800
Projected Net rental Income (per year in £)
Gross Rental Income 13’800
Service Charge 1’350
Rental management fee (8%) 1’104
Mortgage payments 5’063
Net rental income 6’283
Net return on all funds invested 10,24%
Projected 5 years ROI
Net rental income £31’297
**Capital growth (forecast) £85’672
5 year ROI £116,969
5 year ROI return 190,55%
Note:
*first year assured 6% rent is an offer from the developer.
** forecast is based on Savills report at 24.3% (I’m not betting on it)
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To put it into perspective, the £ risk free rate is currently 4.5% (and might continue going up).
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Telegraph had an article on UK buy-to-lets yesterday (find the full article on archive.is):
A quarter of the buy-to-let properties sold so far this year had yields of 7pc or more, up from 19pc in 2022, according to analysis by Hamptons estate agents.
The share of landlord sales with yields between 5pc and 10pc has climbed from 56pc to 63pc.
The average buy-to-let mortgage rate for a two-year fix climbed to 6.21pc on Friday, up from 5.62pc at the end of May, according to Moneyfacts, a data company.
Now what I’m personally seeing (Eurozone) is that with only variable mortgage product available, mortgage rates have increased above rental yields actually obtainable.
Make of that what you will 
I found a market in Portugal that I want to explore when I find a good opportunity: rent by the room.
Buy buying an old 4 bedroom apartment, you convert the living room into an extra bed and do 10k of renovations (kitchen/bathrooms) and 8-9k to furnish the place.
You rent it starting from 380$ per room and since you are able to finance 90%, you get great cash on cash return.
I will come back with my practical case when I have done it!
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Works well in university cities. The big minus is a high turnover with a potential high vacancy in summer and winter (graduates/Erasmus students leaving end of semester new ones coming with the new semester starting).
Means a lot of turnover and potential damage = hassle
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6% - if achievable on the open market and not just smoke and mirrors from the developer - is above the UK long term inflation target of 2% and also above the long term average mortgage rate of ~5%.
In the meantime UK Inflation is about 9% which is feeding through to rents.
If I am a leveraged investor I would rather invest with those numbers as opposed to 3% net rental yield and hoping for low interest rates to continue - like many UK BTL investors have done for the past 20 years.
Maybe UK property is on the way to becoming invest-able again soon -especially if the articles in the press are anything to go by (be greedy when others are fearful…!)
Make sure to budget for vacancies, especially if it is a 1 bed they usually turn over every year. And repairs and replacement of furniture.
Service charge: the UK properties I have owned both started out with service charges around this level. The budget more than doubled in 10 years. The developer is not motivated to propose a conservative budget
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