Investment dilemma >> Real Estate VS ETF?

Dear All,

Posting here to get your views on a dilemma:


  • Late 30s, in couple, 2 young children, living in VD Canton for 3 years
  • Own our principal residency for 2 years
  • Savings capacity of 16k CHF per month ~200k per annum
  • Capital to invest of ~200k-300 CHF

Investment strategy

  • Tax reduction via 2nd and 3a Pillars >> ~100k per annum
  • Stocks with premium / employer shares >> ~60k per annum


  • Question is what to do with the 200-300k capital + remaining 40k annual savings capacity

  • Option 1 is a full ETF tracker: 200k initial + 2k per month leads to cumulated capital of 800-900k after 9 years if assuming 6 to 7.5% average yield

  • Option 2 is the acquisition of a small appartment in Paris for example, let’s say 60sqm for 750k and do short-term rentals. Rental Revenues after deduction of various expenses + 2k per month allows to cover the loan and to reach accumulated capital of ~900k as well after 15 years if assuming 1.5% per annum avg real estate price increase. A rather conservative assumption.

Possibility to boost return on option 2 via tax optimization scheme (e.g. deduction of renovation work…etc)

What would you pick ?

note: 1.5% in EUR is likely a a negative number in CHF term. What happens if taxation for short term rental changes? Or there’s big restriction? (not unlikely for a city like Paris)

Maybe start by writing down your return assumptions (in comparable terms, yields in identical currencies).

IMO overall it’s more a question about what portfolio allocation you want to have (how diversified, how much hands off, etc.). Stock vs. real estate will behave very differently and have very different kind of risks etc.

Isn’t it more like 600k to 700k? If you meant 15y (to match the real estate horizon), then you’d get 1M to 1.2M with your assumptions.

(another sidenote: also be aware of your biases, for instance there are heavy cultural biases for french people to go towards real estate, partly due to having so many tax advantages/incentives, it’s not really the case in Switzerland)


Option 1 is liquid.

Option 2 is not.


Not adding much here but don’t forget to consider the amount of work acquiring a rental property in Paris would be compared ETF (i.e. somewhere between “some” and “quite a lot” of work for the apartment versus “almost nothing” for the ETF). I’m not in property at all but I would guess the short-term rental business is far from passive.


Short-term rental? Like Airbnb? As Quack stated, that does sound like a lot of work and risk for regulation.

Unless you plan to live in that apartment mid-term yourself, I’d would go with option 1 along with your buy-in to pillar 2. You don’t give details on your employee shares, that could be a substantial risk or a huge opportunity.

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As others wrote, going RE for short-term rental is much riskier and complex than buying a diversified ETF of stocks. But such an investment can have a place in your portfolio and produce interesting returns, the question is what portion of it.

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Why not do this sequentially. Invest in ETFs for a few years, and once you hit a certain milestone, think about buying a holiday home to enjoy with the kids with some of that accumulated capital.

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Thanks for all the answers provided so far, let met add a few complements / comments.


  • FX CHF / EUR: you’re may be right… true that I have not factored in any currency effect in my reasoning so far as I see the CHF / EUR to remain volatile in the 0.90-1.10 corridor.

  • Rental restriction: have factored in the existing regulation which is already quite strict (max number of nights per year)

  • Cumulated capital: was meant to say 15 years indeed to match RE horizon (typoin my 1st message, now corrected), and land at 900k assuming a 200k initial payment + 2k/month over the period with an avg. yield of 7.5%

  • I’m French hence potential bias towards Real Estate :slight_smile:


  • True option 1 is liquid


  • Agreed as well. Here I have factored in some agency fees (that are decreasing my available rental revenue) so that someone manage a big portion of the work for me but agreed, real estate will always be more work than an ETF


  • Agreed on work / regulatory risk > even though I have been conservative in my assumptions, it can always get worse

  • Employee shares: this is part of a long-term incentive plan. I get some free shares of my company (representing ~30% of my annual base salary) that are pledged for 3 years. And then, I have them free to execute. So no big risk here as I have them for free, it’s just that I have to wait 3 years to really get them (If I quit before the 3year period, I get nothing).


  • You’re right. Actually, investing “a lot” (at least for me) on ETF leads to some stress and mental charge when amounts will start to get high and subject to volatility which is intrinsic to this investment. I’m ok to do a part of It but not too much even if I’m not maximizing the overall yield by doing so, I will favor my tranquility


  • Actually a good idea as it is true that in the short term we don’t have much envy to buy a holiday home as of now, especially as we just bought our principal residence
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And this is becoming potentially more an Investment portfolio question but in that option 1, what would be your recommendation for the ETF investment in my situation?

  • Full ETF World ?
  • Full ETF S&P 500 ?
  • A blend ?
  • CHF Edge or anything ?
  • If you have any specific tracker to suggest,that would be great as well so that I can check options
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Blend, obviously.

VT / CHSPI is the default recommendation around these parts, mainly because it’s so damn easy to run with.

I’ve personally had a decent 2024 with a 33% each blend of SHV / VT / IAU and have lately started adding CHSPI into a side pocket. :wink:

I can’t truly picture your situation as I don’t know how I would react if the stakes were 200k-300k a year but trying to do it, I come up with this:

  • Stocks have high volatility (short term and long term). A durable -50% value that takes 10+ years to recover (if it does) should be expected. A -80% is in the realm of the potentially happening.

  • Real estate prices are more stable, partially because they are harder to assess and don’t get publicly published every day. Their lack of liquidity means that the funds could not be available at the time you need them.

  • I personally prefer the more liquid, more passive option of ETFs, however, I would personally probably not feel good having your level of future assets submitted to the stock market fluctuations and vulnerable to losses.

I would not put 100% of my wealth in real estate and I would not put 100% of my wealth in stocks. I would personally not try to diversify my stocks with real estate only but use some amount of bonds and other commodities. My first step after having evaluated what’s at stake (which you have done) would be to ponder on my desired allocation and write down an Investment Policy Statement (IPS - the guidelines of why and how you are planning to invest that you can come back to in times of turmoil).

Lazy Portfolio has a wide array of model portfolios with useful metrics to compare: Lazy Portfolios: ETF Allocation

Portfolio Visualizer allows for visual backtests allowing for a better grasp of the volatility and returns a portfolio has gone through. You can compare up to 3 allocations at once :

Both tools are USD and US centric but for the purpose of getting a broad idea of what your risk tolerance is and choosing a general allocation, I find that it is good enough (with the mental cheat trick of replacing US stocks / US bonds by World stocks / Dev bonds when appropriate).


Similar to Wolverine I don’t have this kind of liquidity, however given I stand to own some properties outside CH I am already planning getting rid of all of them besides one, which will become my home in retirement.

I’d stay away from RE like the plague, too much work, time, liquidity sunk, regulation, taxes. On a philosophical level RE feels intellectually lazy (not talking about you, but people I know with many properties). I saw in my own family how splitting RE in inheritance can cause huge rifts and fights among people, I don’t want that for my kids so I don’t plan to leave them multiple properties. A big part of my progress in life is due to moving, houses can root people in place, I want them to think big and wide, not be confined to a place just because they don’t have to pay rent. Also to keep them a bit hungry and agile, while also teaching them about investing and compounding, something nobody did for me.

My plan when hitting the 500k milestone is switching a good chunk of it to preservation and much slower growth, but more predictable passive income.



Many Thanks for this !

May I kindly ask you to share the full names or ISIN behind each acronyms ? Would like to check the various trackers proposals to understand better what they respectively bring

Thanks in advance, it’s just so easy to fall on the wrong tracker when you don’t know them in details yet

Look them up on Yahoo Finance

CHSPI is Swiss large/mid cap (ie a play of CH and SPI), VT is Vanguard’s Total world market, IAU is iShares (Blackrock) AUrum (gold) ETF, and SHV had to google, it’s short-term treasury bonds.

VT is objectively the most diversified single fund, VWRL achieves the same while being on the SIX in CHF, and more expensive than VT. No issues with ever having to think about US inheritance malarkey with it though. Personal opinion is that one can do just fine with just VWRL, or VT if they’re feeling extra cheap and really want Russian camping gear rental companies making up 0.0001% of their portfolio. The jury is still out regarding passive income on a theoretical level, the latest simulations suggest 100% stocks still win, but my gut feeling is that these are paper exercises while real people will likely benefit a lot from a tilt away from equity in terms of volatility, preservation and sequence of risk.

Well you do have some exposure to a single company and it’s part of your compensation. It’s interesting to me that you worry about stress from volatility in global markets, but are relaxed about the company shares or buying a rental apartment. I guess we all have different risk preferences :smiley:

That’s what I would do. It does contain a significant US portion, if that’s what you meant with blend. You’ll find many threads here discussing optimizing fees, taxes or tweaking individual regions or sectors to individual preferences.
But to get started, anything resembling the MSCI or FTSE World index with or without Emerging Markets and fees below 0.2% will do it.
You could start at Blackrock’s iShares or Vanguard site, either European or US, go to their Core ETF section to get a selection.


Note, iiuc they’re actually putting significant amount of their savings in pillar2/3 (unclear if pillar3 is mostly on equity)

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  • Regarding the company shares, I really consider this as an extra bonus, cherry of the cake in my comp’ package. And I am not taking risk on it, it is given to me, so I heritate from the exposure it’s not chosen on purpose.

Regarding overall allocation, our current status is:

  • Most of our capital (ie ~65%) is in Real Estate via the recent acquisition of our main residence
  • ~20% in guaranteed capital / low risk accounts (savings accounts, 2nd pillar, …)
  • The rest is ~15% in equity (a bit of tracker ETF World, company shares, 3A pillar with 80% equity …)

And we have upcoming capital to invest (cf 1st message - initial ~200k + savings per month.)

Indeed plan is to pursue allocation, with the safe part via 2nd pillar (for short-term tax gain), a bit of real real estate (main residence loan reimbursment) and my question is focused on the remaining part.

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Last question, if you had a significant amount to invest in equity (either MSCI World or S&P 500), what would be your entry strategy given the current market situation (high cycle point, warning about potential correction everywhere…)

i. Slicing in 4 tranches, every quarter over the next 12m ?
ii. Same as i. but waiting for 3 months to see how it goes
iii. Idem que i. or ii. with slicing in only 2 tranches ?
iv. All in now, WTF !
v. All in 3 to 6 months !!!
vi Others ?