Looking for advice on what to do with 300K CHF
- Thread starter maxamir
- Start date
@maxamir Two years ago my wife, our two kids and I also had 300K in cash to invest. We used 200K for a mortgage (5.5 room appt. For 1 Mio .- CHF), 50k in ETFs and 50k for watches.
The best investment was definitely the appartment we live in (back then the interest rate was ridiculously low with 0.79%) but even with a higher rate it is still interesting.
Not only does the value of the appartment increase with time, but the down-payment of the mortgage is basically another savings account for you.
Not buying your own property would be a huge mistake as it is almost a loophole designed by the rich for the rich - escaping the scam of renting an appartment that belongs to sum pension fund looking to maximize profits.
The best investment was definitely the appartment we live in (back then the interest rate was ridiculously low with 0.79%) but even with a higher rate it is still interesting.
Not only does the value of the appartment increase with time, but the down-payment of the mortgage is basically another savings account for you.
Not buying your own property would be a huge mistake as it is almost a loophole designed by the rich for the rich - escaping the scam of renting an appartment that belongs to sum pension fund looking to maximize profits.
onewayjesus
New member
@ryno13 While true if you live in it and badly wanted your own place, there is a calculator on moneyland buying vs renting your place where you can see that it does not make sense to buy.
If you put the downpayment into a ETF and keep it there, you will make much more money even with real estate appreciating.
The question is what OP really wants…..just to invest money smart? A place to live?
You cant have both.
If you put the downpayment into a ETF and keep it there, you will make much more money even with real estate appreciating.
The question is what OP really wants…..just to invest money smart? A place to live?
You cant have both.
@onewayjesus Sorry but I dondt agree, you can have both but only through buying real estate.
Currently we have a down-payment of our appartment of around 1200CHF/month for the next 10 years and 500.-/month of interest rates. The interest rates are "lost".
However the down-payment is via our 3rd pillar (3a life insurance) which is in fact invested and deducted from taxes and 100% still belongs to us (if we sell the appartment this money is ours).
Also take in account that the renting value of the property is around 2400.- CHF (what our neighbour's with the exact same appartment pays as rent), this means we save 700.-/month additionally that we can invest in ETFs. Yes we pay more taxes because of the "eigenmietwert" but it is just ridiculous how much more money we have left now versus when we were renting.
And about the ETF, you don't know what the future is made of. You may make more money but you may also loose more.
Currently we have a down-payment of our appartment of around 1200CHF/month for the next 10 years and 500.-/month of interest rates. The interest rates are "lost".
However the down-payment is via our 3rd pillar (3a life insurance) which is in fact invested and deducted from taxes and 100% still belongs to us (if we sell the appartment this money is ours).
Also take in account that the renting value of the property is around 2400.- CHF (what our neighbour's with the exact same appartment pays as rent), this means we save 700.-/month additionally that we can invest in ETFs. Yes we pay more taxes because of the "eigenmietwert" but it is just ridiculous how much more money we have left now versus when we were renting.
And about the ETF, you don't know what the future is made of. You may make more money but you may also loose more.
@brayden True. We put 150.-/month in the maintenance fond (deducted from taxes) and if something breaks I have to replace it on my costs and I have to pay for any maintenance in my appartment.
But still if my neighbour pays 700.- more than I do it's not because his owner is doing charity... it is simply cheaper to own than to rent (at least with a mortgage of 0.79%).
But still if my neighbour pays 700.- more than I do it's not because his owner is doing charity... it is simply cheaper to own than to rent (at least with a mortgage of 0.79%).
edwinmorales
New member
onewayjesus
New member
kevin__huang
New member
@onewayjesus You are spot on - what does OP want? There is a huge lack of clarity in this regard.
Also: don't buy the first house you see. Take some time. You know in all your hearts when it is a yes house.
Also: don't buy the first house you see. Take some time. You know in all your hearts when it is a yes house.
@kaytiedid
- We both think that for the moment, it would be rental income as we don’t want to leave Zurich for at least the next 5-7 years.
harperthe3rd
New member
@maxamir In my opinion it's not yet an ideal time to buy property. Interest rates are still crap and the prices haven't really fallen. Most people I talk to advise against buying property in this current environment.
Or let's put it differently:
If you really like the place and can afford it, go for it. But don't think that it'll be the highest ROI move for you.
Or let's put it differently:
If you really like the place and can afford it, go for it. But don't think that it'll be the highest ROI move for you.
@harperthe3rd Will there ever be a good period to buy? Prices keep rising or maybe just a temporary stop recently. I can't see houses becoming more affordable in the future.
@nungirl_7 Some people are hoping interest rates go down to almost 0 again, even thought this only happened between 2003 and 2008 and 2013 and 2020...
@geodan Today, we are around 2%, which is already on the lower side historically. And anyway, I think that when interests are low, more want to get a property, making the prices rise even more.
In the opposite, a rise in the interest rates can make it too expensive for some owners, and there are more sales. I thought we would see an effect over the last year, but prices didn't fall in my area, barely stagnated.
Currently I am in a similar situation as OP. We have the funds to buy a house, but can't find some good enough in our bracket. Because we already own an apartment, we may just stay there and invest the money instead, since we already "secured" a living place.
In the opposite, a rise in the interest rates can make it too expensive for some owners, and there are more sales. I thought we would see an effect over the last year, but prices didn't fall in my area, barely stagnated.
Currently I am in a similar situation as OP. We have the funds to buy a house, but can't find some good enough in our bracket. Because we already own an apartment, we may just stay there and invest the money instead, since we already "secured" a living place.
harperthe3rd
New member
@nungirl_7 IMO it's not a question of affordability.
Houses did not become less affordable, because affordability requirements of the banks haven't changed. It's just that mortgages became more expensive. Hence, I think it's a fair assumption that mortgages will become less expensive again at some point.
Will lower interest rates drive up the price? For sure, but they can't explode because people still need to meet the bank's affordability requirements somehow.
Therefore I don't think it's stupid to wait with buying a house, unless you find a house that you really really love.
Houses did not become less affordable, because affordability requirements of the banks haven't changed. It's just that mortgages became more expensive. Hence, I think it's a fair assumption that mortgages will become less expensive again at some point.
Will lower interest rates drive up the price? For sure, but they can't explode because people still need to meet the bank's affordability requirements somehow.
Therefore I don't think it's stupid to wait with buying a house, unless you find a house that you really really love.
@harperthe3rd Yes it did become less affordable. I have a few examples of people who construct their house in the first half of the 2000s (so land + new house), and the current price of their property doubled 20 years later. Did salaries doubled in 20 years? Unless my thinking process is wrong, it became less affordable to me. Also according to some sources on internet, average mortgage interests where 3.25 to 4% in the early 2000, 2% now.
Main reasons are land scarcity, and more recently higher construction costs.
Main reasons are land scarcity, and more recently higher construction costs.