looking for advise. I own an apartment in ZH and I moving to Zug due to work reason.
I am thinking to rent the apartment at least until th mortgage is over.
Any thing that I need to consider.
How to calculate the nebenkosten (are the full amount of building cost or only part of it as I pay for the future renovations…)
I think you should get advice from Hausverein or Hauseigentümerverband. If you happen to rent to a Mietnomade losses are immediately in 5 figure territory.
afaik you have to exclude the renovation fund (“Erneuerungs Fond”) part. The rental price should match the mortgage interest at 5% and you might also want to inform the bank that you’re renting out now. Also if you took out Pillar 2 money it has to be paid back before you can rent out the appartment.
Thank you for the tips.
I was thinking on it… I thought to rent it via an agency.
Does anyone know a real state agency to manage the rental apartments?
Thank you Mr. Cheese. Good thought
I thought that the rents are related to the indexes so if interest rates go up they will need to pay more and if interest rates go down they pay less. What I am not sure if both indexes are related.
In order to calculate the price I have done the following:
- mortgage Interest
- 1% of the apartment value for renovations
Main issue is that if I set 5% mortgage interest to calculate the monthly rent the value is too high.
Aren’t you going backwards, shouldn’t you ask the market price for rent? (So instead of computing it from your mortgage/value of apartment, find at what price similar properties are getting rented)
Actually you need to do both. Look what you can on the market and then see if it is worthwile by doing his calculation.
Btw Nebenkosten are charged separately from the rent, so do not include it into the rent cost but make a separate calculation (at least the part which is claimable, more details at HEV).
Always that Mietnomaden thingy.
In France, only 1.3% of all rents are paid on time. This also includes late payments by a few days. So the Mietnomade is actually a pretty rare breed. Of course you have to do due diligence, but no need to be excessively afraid.
BTW, in France, there are more landlors acting illegaly than renters, however, the focus is always on the Mietnomade.
Finally, you insure yourself against Mietausfall, to be checked how it works in Switzerland.
I did already. Price was 2470 for a really similar apartment
But I need to calculate as well if this price makes financially sense, don’t I?
Because if not, I will sell it without postponing the decision of sell or rent until the mortgage will expire
I believe here in Switzerland numbers are better. Specially as you need to present the document that you have no debts. This people can do it once and until is not replay cannot rent anything (I want to believe it) so you need to be really unlucky. Another thing are payment delays… Shits happens specially during this covid uncertainty and it could be a good way to protect your income to insure it. I will check with my insurance the cost of it to understand if I take the risk or not
If the mortgage expiration is your only concern then please keep in mind that you can usually “sell” your mortgage to the new owner of the property. As in you transfer the existing mortgage with the same conditions which should be possible if the new owner passes the sustainability calculation (e.g. 33% of income > 5% theoretical interest rate)
As @nabalzbhf and @Patirou said, start with figuring out what the market price is, and check the expected net returns, example here
Tipp : I consider Erneuerungsfond as downpayment, as when you sell you usually do not get it back and it is “lost”.
Nebenkosten: you can decide to have effektive costs or a flat rate
Lastly, you can expect your bank to ask you for a Sonderamortisation (ca. 5% downpayment, can be more if the Tragbarkeit with the 5% interest rate sucks) if you rent out
Do you have the split between rent and Nebenkosten?
Last (little) thing which could be really annoying
If you used Pillar 2a for downpayment, I think you have to reimburse that part if you will rent it out. To be checked but I thought I read something like that once.
You are fully right @Patirou
I used it as pledge but already removed.
it was with Nebenkosten included(c. 250 ) as far as I remember.
Erneuerungsfond but you mean for the building, not for the apartment.
You will need to add/ park some money to maintain/ renew your apartment (normally 1% of the total cost)
Thank you for the link