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Your house (or flat) has outgrown you, or following a death or divorce you'd like to move elsewhere. You're wondering whether you should sell or rent your home.

Arguments in favour of selling

Project

You would like to invest the funds in another project, for example you want to buy another property and need the equity to finance it.

Alternative investment

If you sell your home, you will immediately receive a large sum of money after paying tax on the property profit. How should you invest this money? What are the risks of an alternative investment? You've already found the answer to these questions and want to invest your money elsewhere.

Major work to be carried out

Your house will need to be renovated before it can be rented out, or major renovations will need to be considered in the next few years. You don't want to look after it or you don't have the means to finance the work.

Rental risks

You know that renting can involve risks that you don't want to take, such as unpaid rent, vacancies, damage to the property, etc.

Falling sale prices, high mortgage rates

If selling prices fall and you have a high mortgage debt and mortgage interest is rising, it may be more favourable to sell the house. The right to a rent increase in the event of a rise in mortgage rates is clearly defined in Swiss tenancy law. If your mortgage debt is high and the mortgage rate rises, the rent increase authorised by law will not enable you to cover the actual additional costs of mortgage interest. In the event of a fall in sales prices, the banks may ask for additional amortisation.

Arguments in favour of renting

Retirement and family heritage

You've retired and your children no longer live with you. The house has outgrown you and you've already bought or rented a flat to live in. Your mortgage is largely or entirely paid off. You want to supplement your retirement with an additional income. The house has been part of your family heritage for generations and you want to pass it on to your descendants.

You have inherited a house and would like to preserve the family heritage and generate an income.

Emotional bond

You have fond memories and an emotional bond with your family home and you're not ready to sell it.

Option to return to the house at a later date

You have to go abroad for a few years and would like to return to your home one day, or your children would like to move in when they start their own family.

Rising sale prices, low interest

If selling prices are constantly rising and you've done the calculations, you may come to the conclusion that keeping the house and renting it out is the best solution for you.

Estimates and calculations

You know the value of your property and the usual market rent. Then you've calculated the return you'd get from renting it out. You have simulated several scenarios and calculated the break-even point. If you have mortgages, make the calculations with mortgage rates higher than the current rates. Also take into account the impact on your tax return. The rent should be set at an appropriate level and at least allow you to cover the costs.

Ask an estate agent for advice

It may be a good idea to call on the services of an experienced estate agent who works in the area where your property is located. He or she can advise and assist you with the sale, letting and management of your home.

Conclusion

Deciding whether to rent or sell your home is not always an easy decision and needs to be carefully thought through. 

© Author Esther Lauber, Real Estate Trustee with Advanced Federal Diploma of Professional Education and Training, real estate agent, property broker and manager in Carouge Geneva, Geneva, speaks German, French and English
Translated with DeepL and correction by Esther Lauber. In case of doubt, the French version applies to translations.