5 secret tips for foreign investors who want to make high and secure returns with Swiss properties

Let me tell you what you need to know, if you would like to invest successfully in property in Switzerland. What do you need to know, before you purchase property here? What steps will you have to follow, if you are looking for investment properties as a foreign investor in Switzerland? What do you have to watch out for, if you want to invest safely and avoid expensive mistakes?

If you want to invest successfully and in a targeted way, then you should never consider investing in property that has already been advertised to the public. You will just lose time and money with properties that are already on the market. If somebody is offering a property over the internet, you are never sure who the person is, that you are dealing with. You do not know if the person even has the sole selling rights. It is possible that an unknown third party has already promised the property to someone else. It is possible that the owner does not even want to sell. Many owners do not want to sell their property at all, but they just want to find out how much their property would be worth, if it were to be sold. Very often, expensive properties are misused, as a means of attracting financially strong investors, so that they can be offered other kinds of investment. Insiders see this as so-called fishing expeditions.

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Normally, the seller already has an estimate from a recognised valuer such as, for example, Wüest & Partner, but this should not be more than a year old. We all know recognised and independent valuers, on whose expertise you can rely. By selecting the wrong valuer, you risk making a massively bad investment. In my 30 years of experience, I have often observed how good properties on the open market were simply burned out. These are precisely the properties that were offered for years on the internet or by shady real estate broker, and never found a buyer.
To be on the safe side, and to make sure that you never lose time and reputation, you should always demand to see the exclusive mandate to sell in writing and make sure it’s not expired.

And this is my first important tip: Best Place to invest in property is concentrate on off-market targets. Off-market properties are never publicly offered, and always sold behind the scenes. That is why you should only turn to specialist lawyer firms like us, or to private banks or family offices. Through us, you have a unique opportunity to gain access to the exclusive club deals. Club deals are typically offered by private banks only to selected clients and ultra-high net worth individuals. We bring such opportunities to you as our client.

My second tip: If, as a foreign investor, you would like to make an above-average return, then concentrate on commercial properties in the industry, hotels, logistics and retail sectors. Because of the restrictions in what is known as the Lex Koller-Friedrich law, foreign investors who are not resident in Switzerland, are not allowed to purchase residential properties. Unfortunately, there are still some law firms that offer complicated company structures, to disguise the true foreign owner’s identity. This tactic for avoiding the Lex Koller-Friedrich law does not work any more these days. In the worst-case scenario, you risk a prison sentence.

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Third tip: residential property in the Canton of Zurich, for example, hardly brings a gross return of 4%. Thus, it is not a disadvantage, if as a foreign investor without residence in Switzerland, you are not allowed to invest in residential properties. Our commercial properties in the industry, hotels, logistics and retail sectors are absolutely off-market properties and they always achieve a higher return of 5%-7%, and with lower risk at the same time. What exactly does lower risk mean? All commercial buildings generally have long leasing contracts with several international firms which have good credit worthiness. With residential properties, the administration costs are considerably higher. The fluctuation of residential tenants is huge in comparison to commercial tenants. Moreover, the credit worthiness of international firms is much more stable than that of a private household. We accept mandates only for commercial properties in which the tenants can demonstrate very high credit worthiness and a good reputation. What other kind of investments today could realise such dream rates with so much security? I can’t think of any. No bank will give you a return of between 5% and 7% with so little risk.

Fourth tip: look very closely at the tenants’ rent schedule. The rent schedule provides information on the length of the rental contracts, and the identity of the tenants in each property. Only long term rental agreements with options for extension are attractive. The ideal ones are contracts for at least 5, 6 or 7 years, which have an option for a further 5 years.

My 5th tip: Swiss banks guarantee generous mortgages for good Swiss property, which can cover up to 80% of the purchase price. Moreover, the interest rates for mortgages in CHF are at present below one per cent. Thanks to our excellent connections with banks and insurers, we can arrange for the financing of your mortgage at an interest rate of, for example, 1% for a term of 10 years. In collaboration with our partner banks and insurance agencies, we can also offer you alternative financing models, that normal estate agents can only dream of, such as for example, mezzanine financing, which allows you to increase the leverage effect, and with it the effective return. Mezzanine-financing fills the gap between your own capital and other capital.

If you are a foreign investor, and you want to achieve a high return on property in Switzerland, you found the best Place to invest in property. If you are looking for access to exclusive club deals, to purchase properties that other investors can only dream of, then reach for your mobile phone and call +41 44 212 44 04. You will speak with me personally on the telephone, and we can discuss how to achieve the maximum leverage effect from your future dream purchase, along with maximum returns. Take advantage of my 30 years of experience and my network of relationships with partner banks to negotiate a tailored financing model, so that you as a foreign investor can make your investment securely and with a high return. Be rich and remain rich. Have a nice day.