Build Your Financial Future with Swiss Real Estate
How to prepare for the future by investing in Swiss real estate
Looking to grow your savings to prepare for you and your children’s future? Investing in Swiss real estate is the perfect way to build long-term, sustainable wealth. Find out how real estate can provide you with real and lasting financial stability.
The AHV: an insufficient pension system
The Swiss pension system has certain flaws, and unfortunately does not guarantee you a secure retirement. In fact, in recent years, pensions have been falling steadily.
So much so, that retirement consistently tops the list of Swiss people’s main concerns. Now, even people in their thirties are worried!
Many people are therefore looking for an alternative or a reliable complementary solution to secure their financial future.
Among the solutions available to ensure a more peaceful retirement, real estate stands out for its unique potential and track record of returns. Investing in real estate provides a way to make ends meet and build up long-term savings. It’s an effective way of making up for shortfalls in the AHV system, and securing an additional income for retirement. Whether you have substantial or limited capital, Swiss real estate opens up a world of possibilities!
Why Invest in Swiss Real Estate?
Swiss real estate, a buoyant market
Switzerland is currently Europe’s most attractive real estate market, so it’s not just the walls that are buoyant – the sector is too!
Renowned for its stability, the Swiss market is remarkably resilient, even in the midst of economic turmoil. Benefiting from the overall robustness of the Swiss economy and a favorable demographic and social context (migration flows are still positive, while demand for housing already exceeds supply), Swiss real estate offers good prospects for the years ahead.
A stable investment
Strict building regulations help to keep supply in balance with demand, thus avoiding massive price fluctuations. Overall growth is slow and steady, making Swiss real estate a reliable option to build wealth.
In Switzerland, the LFAIE (Federal Act on the Acquisition of Immovable Property in Switzerland by Foreign Non-Residents) protects the real estate market by imposing restrictions on the acquisition of real estate by non-Swiss residents. This prevents excessive speculation and protects the Swiss real estate market from rapid and undesirable fluctuations.
Finally, real estate is less volatile than investments in the stock market, since it is decorrelated from the financial markets. The sometimes brutal and unpredictable fluctuations in share values have very little impact on the real estate sector, which is not dependent on the financial health of listed companies.
It therefore represents a safe investment option, especially for those nearing retirement.
Real estate investment is also synonymous with stability, in that it is an excellent tool for diversification, providing a well-balanced investment portfolio. In fact, the variety of ways in which you can invest your money in real estate makes it such a vast sector that it alone enables you to build up a diversified portfolio that will provide long-term stability and steady returns.
A profitable investment
Real estate investment has a proven track record of steady returns. Real estate has always been considered as a safe haven, and it remains a reliable market rich in opportunities.
Moreover, real estate allows you to generate a regular income, for example by renting out properties, thus ensuring a consistent cash flow. This additional income can contribute significantly to financial independence, helping to cover expenses, especially in retirement.
Real estate also offers excellent long-term appreciation potential. Properties increase in value over time, allowing for capital gains on resale.
How to properly invest in real estate?
There are many ways to invest in real estate. They fall into two broad categories: direct investment, and indirect investment.
- Direct real estate involves the purchase of a property. The investor becomes the owner of the house, apartment, building or parking space, and can rent out the property as a rental investment. The advantage? The purchase of a tangible asset. The disadvantage? This approach requires a substantial financial commitment, ongoing operational responsibilities such as maintenance and finding tenants, and therefore greater personal involvement in day-to-day management.
- Indirect real estate investment involves the presence of an intermediary. This intermediary is responsible for pooling the funds of different investors, and will carry out the investment and provide management.
In Switzerland, opting for direct investment in real estate, also known as the “buy to let” strategy, can be quite constraining. It requires a substantial capital outlay, which can be an obstacle for many investors. What’s more, the day-to-day management of a property, from finding tenants to regular maintenance, requires time and commitment.
Is investing in Swiss real estate a privilege reserved for the few? Not at all! There are accessible ways of investing in Swiss real estate.
Real estate crowdlending and crowdinvestment in co-ownership are good examples.
Investing in real estate starting from CHF 10’000
Foxstone’s real estate crowdlending solution offers an attractive fixed return with a defined maturity and an accessible investment amount, starting at CHF 10,000. It consists in lending funds to a real estate company to finance the development of a project or refinance an existing asset.
In return, investors earn annual interest or interest at maturity. They get their initial investment back at the end of the adventure, which generally lasts from 1 to 3 years.
The average yield for this type of investment starts at 5%.
Another alternative: crowdinvesting in co-ownership. This solution provides access to property ownership, without the constraints of property management.
Foxstone gathers investors to jointly acquire an existing, already-rented investment property. In return, they receive a rental income from the rents paid by the tenants. The day-to-day management of the property is carried out by an independent property manager.
Real estate, the ideal investment for your and your children’s future?
Affordable investments, stable returns and long-term appreciation potential: investing in real estate in Switzerland is the ideal solution for building up savings over the long term, creating family wealth and having the resources to finance a major one-off expense. So you can look forward to retirement with peace of mind.
It’s also a solution that allows you to look forward to your children’s future studies or professional career with peace of mind. Tuition fees, housing costs… Higher education can be expensive. These are major expenses that you can finance with the additional income generated by your real estate portfolio, or by capitalizing on the sale of a property.
Moreover, by thoughtfully incorporating real estate into your estate planning, you can ensure a smooth transition of your wealth to future generations, and guarantee them a more comfortable future.
Integrating Real Estate Investment into Your Overall Financial Strategy
Real estate investment can stand on its own when it comes to building long-term savings, but that’s not its only advantage.
Thanks to its stability and diversity, it also offers excellent synergy with other types of investment, and provides an effective means of balancing a portfolio.
The aim of an investment strategy is to maximize returns, while reducing risk. Equities, gold, cryptocurrencies: whatever type of asset you invest in, your portfolio will benefit from the presence of real estate investments.
Generally speaking, real estate offers :
- Sectorial diversification,
- Geographic diversification,
- Low volatility and protection from the whims of the market.
All these features make real estate a relatively low-risk sector, compared with other types of investment.
In the case of a buy-to-let property, the property is also a tangible asset, which can be used to increase or reconstitute capital through resale, should the need arise.
Products such as crowdlending or crowdinvesting in co-ownership mitigate the relative illiquidity of real estate assets, and offer greater flexibility.
The added stability and safety offered by real estate makes it an essential part of a global investment strategy.
Caution! All investments involve risks. No investment is guaranteed to be 100% safe, and past performances are no guide to future ones.
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