Real yield: 2.5-4.5% net in 2026
The gross yield agents quote (annual rent / purchase price) averages 4-5% in Switzerland. After real costs — maintenance (1%/yr), renovation provisions (0.5%), management (5-7% if delegated), building insurance, communal taxes, vacancy (1-2 months over 5 years) — net yield drops to 2.5-3.5% in big cities (Geneva, Lausanne, Zurich) and 3.5-4.5% in secondary metros (Fribourg, Lucerne, St. Gallen). Compare to 1.8-2.3% on savings and 6-7% historical equity ETF.
The unique tax: imputed rental value
Switzerland taxes a notional income on owner-occupied properties (Eigenmietwert / imputed rental value), typically 60-70% of theoretical market rent. For a buy-to-let where you rent to a third party, you instead tax actual rent received. You can deduct mortgage interest (in full), real maintenance costs (or 10-20% flat option), renovation provisions, and management fees. Typical net taxable: 30-50% of gross rent — making investment attractive at high marginal rates. A federal proposal to abolish imputed rental value is under discussion.
Financing: 75% LTV max, dual amortization
For a buy-to-let, banks are stricter than for primary residence. LTV usually capped at 75% (vs 80% for primary). You need at least 25% equity (at least 10% "non-Pillar 2" — savings, 3a, gift) and sufficient net yield to cover theoretical charges. The 1st mortgage (66%) is technically non-amortizing but must amortize over 15 years in practice. Math: on a CHF 1,000,000 property, plan CHF 250,000 minimum equity.
Worked example: 4.5-room flat in Lausanne
Property: 90 m² in Lausanne, CHF 950,000. Monthly rent: CHF 2,750 (gross yield 3.47%). Financing: CHF 712,500 mortgage at 1.8% mixed (interest CHF 12,825/yr), amortization CHF 9,500/yr. Costs: maintenance CHF 9,500, provisions CHF 4,750, management CHF 1,980, insurance CHF 1,200, vacancy CHF 1,375. Total: CHF 41,130. Annual rent CHF 33,000 - costs + amortization is capital building. Net cash-flow after amortization: roughly CHF -8,000/yr early on. But 2-3%/yr property appreciation expected, so real ROI on equity ~5-7% over 10 years in a stable market.
