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Renting or buying an apartment is a hesitation waltz. To invest or to remain free, these are two visions of life. But objectively, is it better to buy or rent an apartment? Buying an apartment to rent, is it profitable? How to calculate the profitability of an apartment? All the answers to your questions to help you make the right decision.
Should you buy or rent an apartment?
You are at a turning point in your life. You want to leave your current home for a brand new home. And it is quite naturally that you ask yourself the question: should I rent or buy an apartment? Or rather: is it more interesting to buy or rent an apartment? We could offer you a complex comparative formula, but we prefer to direct you to a much simpler tool: the MoneyPark calculator to define which is more advantageous: buying or renting an apartment. Let’s take an example made using this simulator. Between a monthly rent of CHF 3,000 and the acquisition of an apartment at a price of CHF 1,200,000 with a personal contribution of CHF 200,000, the result is clear. The monthly cost of home ownership would amount to CHF 4,503, therefore an additional CHF 1,503, or 50%. It's up to you to compare and judge. Of course, other tools exist. Do not hesitate to ask. In addition, take a look at the real estate market and find out about its evolution in the city or canton where you would like to invest.
Buying an apartment to rent it, is it profitable?
If financially, it is often appropriate to choose rental in the event of a dilemma consisting in renting or buying an apartment, one can still wonder about the relevance of rental investment in Switzerland. To determine whether buying an apartment to rent out is profitable, you need to know how to calculate the profitability of an apartment. The formula to be applied is as follows: (annual rent – operating costs) / equity. For a more advanced project, you will find simulators on the internet allowing you to integrate many parameters. Now that you know how to calculate the profitability of an apartment, you can make the right decision: buy or rent an apartment.
Conclusion: should you buy or rent an apartment?
We have seen that renting an apartment is cheaper than buying one. It is no coincidence that a majority of Swiss are tenants, unlike most other European countries, despite a high standard of living. Certainly, investing allows you to ensure your old age, but its cost represents a significant sacrifice since it prevents other projects from being carried out. Moreover, renting is less complex than setting up a financing file. By remaining a tenant, you avoid property tax, rental value tax or wealth tax. In short, all you have to do is find an apartment to rent. And if SherlockHomes cannot decide for you whether to buy or rent a apartment, he can however assist you in your search for properties to rent or candidates for rental.
This article cannot be exhaustive and does not engage the responsibility of its author.
