Recently, my wife and I have visited a house in a small village that we liked a lot. We decided not to buy it mostly due to logistics: our child just started primary school, and we think that while he is studying it is better to be in a larger center to have easier access to education and also extra-curricular activities (e.g., sports and what not).
Today, the agent called me back saying that they didn’t receive any offer for the property, and that therefore it would be possible to bid for a lower price. While we still think that we would rather not live there, we really like the place, and we thought that the original asking price was already fair (more precisely, we think that the price is not more inflated than prices generally are, fair housing prices is not something that I see a lot in high-income areas in canton Zurich). So, here are my questions:
Does anybody have any clue how easy it is to rent a largish house (5.5 on four floors)? Also, as I mentioned this is not a standalone house, but it’s one half of a bi-familiar building. I understand that there are many variables, I am just asking in general whether it is common knowledge for those who have more market exposure that a similar category of house is hard to rent.
When one under-bids for a house, are there any guidelines to propose a price that wouldn’t come through as a provocation? Like, is it common to offer 10%, 20% less or even more? Another bit of into: the owners want to sell because their kids moved out a few years back and for them it does not make sense to keep maintaining this largish house. Does it make sense tot ask the RE agent for advice? I guess that at this point they would only like to make the sale, so they may be willing to help you get a house at your conditions rather than trying to maximize their commissions.
Should we decide to buy the place to rent it out, is it very hard to manage a rented house or is it recommended to use the services of an agency, so that one doesn’t need to bother with the day-to-day issues? Consider that we are both immigrants, we don’t speak Swiss German and we don’t have an established network of companies that could do the required maintenance works, as we have always been living in a rental apartment.
Any other things that I should factor in our decision? I know that there a lot of posts on the topic to read on MP, but in the meantime maybe I can get some quick tips from the community
If you already decided not to live there, why try to buy it just because nobody else wanted it either?
If you think you might get a good deal, one way to approach is to offer the lowest possible price that you can where if they say ‘no’ you will be glad that they refused.
We think that it’s a very nice property, and reasonably priced, so it could make for a good investment (especially if we could get it for much less). The main question that I have is whether it’s a kind of property that would be especially hard to rent.
The main interest in real-estate is location.
If the area is remote and not easily accessible with few other properties at a reasonnable low price, it maybe not so attractive to rent because other families could purchase a similar place.
You could search similar rental houses to guess the annual rent. What will be the gross rental value ? Or the number of years to rent to cover the purchase price ?
Lastly post a fake rental ads on Anibis/Tutti of a lookalike property to check how many family will be interested.
My 0.02 from looking to move from apartment to house (with garden) for several years.
In ZH canton if it’s not going after 1-2 weeks, there’s some red flag. Either price or age or something else.
Or it wasn’t advertised on the usual platforms?
The competition is literally people going there for a visit, and dropping the deposit right there and then, or same day. There is a very long queue of couples with children or wanting one (more) that are looking for houses, and school is not always in their first priorities.
Rental is even worse, since appreciation of real estate, especially houses with some even as small as a napkin of land, made everyone much more likely to sell, and developers to buy and renovate.
Other than that, it should go like candy imho - search for rental properties with similar footprint in the area and see what the market tells you…
BTW I’m curious if you want to disclose more about location and price.
“small village”, “We decided not to buy it”, “they didn’t receive any offer”. Does not sound smart to buy it TBH. Anyway here are my priceless opinions on your questions
you can study rental listings for similar properties but in general houses are more often owned than rented in my experience so you might not find many relevant ads. In general houses do attract some people (wanting a garden, etc) but push away others (not wanting a garden, etc). The “small village” part is what concerns me the most TBH (you after all don’t want to live there)
guidelines might anyway clash with the specific seller. I’d go with your gut. We talk lots of money so a 10% is already a sizeable loss in absolute terms.
managing a house surely comes with more work (e.g., heating system, roof, basement…), but also perhaps more freedom (e.g., no renovation fund). Obviously not speaking the language of the neighbours and the workers is a complication, but you want to buy a house here so I am assuming you’ll improve on that front. If you do consider an agency for peace of mind, that would cost you a decent chunk of your ROI (for which you surely have a rough estimate, right?), and RE in CH tend to have lowish cash flow returns to start with
if you plan on renting it out you won’t be able to use 2/3 pillars and most bank won’t give you more than 75% of the min(purchase, evaluation) price as mortgage. OTOH, renovations that maintain the value are fully tax deductible (for now) so might be an additional tool to lower taxes
Thank you all for the feedback. Yes, I also suspect that it would be a difficult property to rent, given that most rental ads that I see online are for apartments. And I agree that the absence of offers may indicate that there is a problem with the property or with the sale price. So, probably not a good idea
On this aspect, if it’s the agent who contacted you stating no one had bid on the house and you’re not specifically fixated on buying that specific house, I’d toss it right back to them with a “make me an offer that I can’t refuse”. Then assess if I’m attracted by the house at the new price, accept or decline, rinse and repeat if they come back later with a lower price (they may not, of course).
If they’re the ones solliciting you, it isn’t your responsibility to put a floor on the price you may be able to get by making a bid yourself.
Imo, any emotional judgment when buying a rental property is a mistake. All that should matter is cashflow, vacancy risk, attractively of the location, fiscal implications, etc.. It’s an investment after all. Also let’s not forget that landlords in this country have quite limited rights vs their tenants. You are unlikely to be able to kick out your tenant, if you ever want to enjoy the house yourself.
Another thing you could check: on realadvisor.ch there is a free evaluation tool, which in my opinion works better than others I’ve seen. Try to input the house data and see which estimate it gives you.
Thanks, nice tool! For the record, the appraisal is very close to the requested price (CHF 1’931’700 vs. 1’990’000).
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