NW as % of property value

Curious to know and probably helpful to the community.

What was approx your Net Worth as % of the property value you bought? Or those which are in the planning phase, what’s your target number?

I think the property value should be max. 20-30% of ones NW, that’s why I don’t own property because I don’t have yet the 4-6m CHF required to buy a property in CH that costs around 1.2m CHF :slight_smile:

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Gross (Value) or netto (Value - mortgage)? Fiscal or market value?

A normal salaryman will never have enough money to buy real estate without a mortgage: while you are saving, you are paying rent AND the prices are running away from you.

Our apartment’s fiscal value is barely above the mortgage. Purchase price minus the mortgage is between 15 and 20% of NW including 2nd and 3rd pillars.

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The problem is there are high opportunity costs involved with owning property, e.g. for a house that costs 1.2m CHF you have to bring 240k CHF in cash and it is very likely that you could get higher returns on the stock market with that cash in the long run. Yes you can save on rents but affordable real estate is usually in areas with high taxes and I think I can save more by living in a low tax area without owning property and pay rent, than owning something in a high tax area. In general, I think owning real estate is more an emotional thing rather than a rational investment for most people, that’s why I think it should make up only a small part of your net worth.

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Interesting. Rule of thumb. I was thinking that net worth should be at least 50% of the property value at the time of purchase.

It was

There are just different ratios that one can calculate.

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