I am always surprised when I look at real estate prices in the Valaisan and Vaudois Alps. You can find places for very cheap (by Swiss standards). Sure, in the big-name ski stations (e.g., Verbier, Zermatt) real estate prices are comparable to prices in big Swiss cities, but once you look at more minor stations you can find a lot of cheap places (e.g, many 1 bedrooms in the 200k range). Understanding the nuances of Swiss real estate is certainly not my forté so maybe this forum can illuminate me…
Shouldn’t Lex Weber make prices go up in ski towns as supply will be limited to current inventory?
Why are prices in Berner Oberland mountain towns significantly higher than in similar places in Valais?
Why do more people not buy and rent out their secondary home for when they are not using it?
Are there some costs related to owning a flat in a ski village that are not obvious?
Is it complicated for one to buy an existing flat/villa for use as a secondary residence in a commune where Lex Weber applies?
Background: We own a small chalet in Valais, right on the slopes of a smallish ski area
Yes! And I think it did. Prices have increased more than the average real estate prices - IMHO
Offer and demand…?
Just for the convenience - at least in our case. During higher season (e.g. all winter), our chalet is heavily used (family and friends, like “open doors”). To rent it out, you need someone to manage the whole thing (clean, wash the bed linen, … repair etc.) And you have to keep a very strict schedule (e.g 1/2 - 1 year in advance)! So a spontaneous trip / visit won’t be possible if the whole thing is rented out…
Yes, lots of hidden taxes and costs! At least in Valais… E.g.tax for “cold beds”, tourist / visitor’s tax (even if you own the house!), fees for (private) roads, high(er) operating costs (e.g. electricity, waste, …)
idk
With just the direct variable costs, we could spend 1-2 Weeks per year in a nice hotel with everything included. For us, it more like an “emotional Investment” - not sure, if the case is positive in the (very) long term, though…
Yeah, the advantage of having your own place where you can store things and renovate as you wish needs to be weighed against the advantage of being able to visit a bigger variety of places during vacations/weekends away.
I think the only thing better than owning your own ski chalet must be having a close family member or friend who owns one
Ticino has that, too. I wonder if it’s a country-wide thing?
Speaking of costs, it depends very much on what you want to do. For example, if you want to go fishing, you need a license, and that to my knowledge can be more expensive if you have your residence elsewhere.
How do you get to Valais? You either drive almost down to Geneva, or you go through the Furka. In comparison to Berner Oberland, that’s much less convenient. Also, during the winter, the Goms (that’s where Furka exits the mountain) occasionally is cut off because of heavy snow, so you lose that access point too.
Yes Valais is less accessible than BE, but another common way to Oberwallis with car is Lötschberg (Autoverlad).
Also with the “new” NEAT train travel to Oberwallis has been reduced by an hour, some mustachians would travel to secondary residence by public transport.
Our family owns a chalet in Valais. If you don‘t rent to tourists (and file the revenue as income), you have to pay 1% of the „Katasterwert“ which is easily CHF 2000+ because of the „cold beds“ tax.
It‘s also important to notice that the additional costs are much higher in comparison to urban areas. For electricity we pay more in network fees than the whole bill at our apartment in the city which adds up to about three times the bill for power.
For a house that is about worth CHF 500k we have running costs of around CHF 4500 bit this does not include the „cold beds“ tax, wealth and income tax or the 1% per year you should plan for renovation or the cost of morgage. Adding all of this up you can easily reach 5 figure costs per year without taking opportunity cost into account.
Anybody here has a chalet/apartment in the mountains and rents it out, e.g., through AirBnB? Can you share your experience please, especially the financial side of it?
Being always late booking for the ski holidays (covid uncertainty does not help) I start to wonder whether it would make sense to buy something, use it a few weeks a year for myself, and rent it out the rest of the year. I am afraid that the necessary management costs (cleaning, etc…) would eat up quite a lot of the income, but if I could just save the money (and the planning!) I spend on accommodation when I go on holidays I would still consider it a decent investment. What do you think?
Well, with small kids a lot of flexibility is gone anyway. They might even prefer going to the same place every time. TBH I might also prefer, less stress trying to figure out a good location and find a reasonably priced accommodation.
I can live with that
Maybe. Aren’t sport holidays different in every canton? I’d probably only go a couple weeks a year for skiing, and max one in the summer, plus maybe a few weekends. There must be plenty of weeks left for skiing in winter and hiking in the summer when it could be rented out, also maybe to couple without kids who are not bound to the school calendars.
Yes, and for a good location with higher demand one would need to pay higher prices…
Really so much? I thought it’d be more like 25%? Anyway, even 35% would be doable, assuming I am not buying something big/expensive.
True, in ZH the notary is cheap but it might be (very?) different in other cantons, need to keep that in mind.
As with any other RE investment. My plan actually was to buy another rental abroad. Doing it in CH would probably yield less ROI but the headaches might be a bit smaller given the shorter distance in case a visit in person is necessary.
Well, let’s say I gladly pay taxes on additional income streams
No, I didn’t calculate anything. Until today I thought this was a bad idea “in principle”. Normally one would use the average stock market return to compute this, but given how much the market is up in the last years, I think expected returns are not going to meet the historical average for the short/medium future (famous last words…).
Now I have to worry finding a place to stay for the sport holidays (and maybe also xmas, if the pandemic worsens and quarantine is imposed on the country I planned to visit) and I am looking at spending at least 1.5K for a week (more likely >2k). So I threw the question here, hoping to pick someone’s brain who already did the math and proved it to be (un)feasible or, better still, someone who found it being a decent investment.
I know from my familly that renting a flat in a ski resort will require some expensive maintenance cost as the building will deteriorate more compare to a low altitude city (maintenance for heating system, outside isolation, roof leaks, lifts…).
My aunt was also responsible to rent out both familly flats to friends, acquaintances and dealing with the agency for signing the rental contract and giving the key + checkout, arranging the cleaning lady and so on.
The main opportunity cost will be more on locking your winter/summer holidays in the same village for the next 10/20+ years. You will feel oblige to stay at the same resort to maximise it.
We have a small place in a resort, that we bought for a good price. We bought it for our own use. We spent time and money to renovate. We decided to rent it in peak weeks to cover costs. Then Airbnb came along and the rentals grew. Summer rentals picked up too, as have out of season short stays.
After the initial effort to buy multiple sets of bedsheets and towels, finding cleaners etc which was all exciting since it was our first holiday home, we accidentally ended up with a cash cow earning 5% of property value before costs, which was leveraged up, in addition to capital increase. Improvement projects and things like buying furniture were fun as we could see they added to the rental and resale value. So a very positive experience even if hard work
Now our situation changed and I am done with it. We have a family, the effort to pack up and go there for a weekend is significant. The idea of going there and having to shop and build furniture kits is horrifying, managing 1 family home is enough. Regards the rentals, because our nw grew the return on my effort to manage Airbnb no longer makes sense in comparison to alternative investments (For example I have just spent an hour dealing with someone asking for a full refund for a cancellation because an unspecified family member has died, allegedly)
In conclusion we are planning to sell up but our place served its purpose and we loved it, if you can find the right deal (not sure how easy in today’s market?)I would recommend it so long as you have the energy and passion and are ready for the work.
The returrn I quoted above was after taking into account Airbnb commission which last time I checked was 17%, and cleaning and laundry fees approx 200 chf per rental.
Water and electric about 1000/yr, Insurance 1000, Tourism development taxes and fees 1000, heating 1000, internet 500, chimney sweeping and waste tax 500.
Then you have repairs and maintenance which depends on the property, remember since you are not there if something breaks when rented to a customer you have to pay a swiss tradesperson, count 200-300fr each time, that probably happened once or twice per year. Or you need to be prepared to drive there and roll your sleeves up.
Then there are cantonal taxes, one benefit is that if you take a mortgage you may become “poorer” because in most cantons the taxable value of the property is less than the mortgage value. You can deduct interest, there will be an intercantonal allocation, this can work in your favour or against you depending if you own another property with mortgage
It all worked as we bought at a good price - not sure if it is easy to achieve now
We have a 2nd residence in TI that we rent. Tbh. ist not that you make the big bucks.
We found an agreement with an agengy that organizes all the work (contract, bookings organize the cleaning, etc.) They take a 20% cut. It may seems a lot but when you compare this with the 17% that Airbnb takes its kind of ok.
If we rent it for 12 weeks we are even (including amortisation payments).
Every week after that its a gain. This year we could rent it for 16/17 Weeks. We generally don’t rent it for new year (Party).
not a first hand experience but I have a colleagues that recently bought an apartment in Laax area for 750k or so and I have a look on it.
From a finance perspective, I run the numbers and it is not really positive.
But with a rent of the apartment from 2 (high season) to 4 weeks(off-Season) you mainly pay the whole cost. So you have a “free” residence except form the down-payment of the mortgage.
renting to stanger makes it hard to leave “nice” stuff around since a lot of stuffe goes “missing” or broken.
We solved this by buying lots of 2nd hand things we find for cheap (with good quality). So its not that bad if some mirrirs break.
But it kind of bums you out if you cant leave nice things at “your home” since people crash it.
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