Renting real estate
Are you the owner of an apartment or house and want to rent out your property privately? From establishing the price to handing over the keys: we’ll advise you on what you need to keep in mind.
Step 1: Calculate the rent for your property
It goes without saying that as the landlord, you want to get as high a rent as possible for your property. In Switzerland, however, rents are very clearly regulated in order to prevent fraudulent behaviour and tenants being charged an unreasonable rent.
The rent must be in roughly the same range as the rents for comparable properties in similar locations. You can get an idea of the rent level from the rent index. This is not binding, however.
In Switzerland, the reference interest rate is much more important. This is calculated quarterly based on the average interest rate applied to all Swiss mortgages. In practice, the reference interest rate mainly affects rent increases and decreases. The landlord is entitled to increase the rent when the reference interest rate has risen by at least 0.25% since the contract was signed. The landlord is not obliged to initiate a decrease in the rent if the opposite happens, however. That is the tenant’s responsibility: if the reference interest rate goes down, the tenant must request the decrease via registered letter.
So if you want to calculate an appropriate and reasonable rent for your property, take the customary rents in your area as a benchmark. There are also online calculators that can give you a rough idea. They provide an estimate based on factors like the apartment features and the infrastructure in the area.
Step 2: Prepare your property
Once you have set the rent level, perform a thorough and honest assessment of your property: are there any renovations pending? Does anything need to be repaired before being rented out? Is the property in a good and well-maintained condition?
It’s a good idea to do this kind of work before renting it out. That way you can get your house or apartment back into prime condition, set an appropriate rent and ready your property for the pictures to accompany the listing.
Step 3: Place the listing for your property
Here you should really take your time and spare no effort. The listing is essentially the heart of your rental. It will determine whether prospective tenants respond and whether they are the right people for the property. Before you create the listing, think about the target group that you want to address. Is your apartment particularly family-friendly with sufficient space for kids and everything that comes with them? Then you should focus your efforts on appealing to families. Or do you have a small apartment in the city, close to bars and restaurants? Then perhaps young couples or singles are the target group you want to reach.
The important thing is to get a sense for the special attributes and characteristics that your apartment or house has to offer and then describe them in your private listing in a way that appeals to your target group. Here’s an example: ‘With its 3 large bedrooms and 2 bathrooms, this ground-floor apartment is perfect for families: enough space for everyone, a small garden to play in and everything on one level for pushchairs, tricycles and scooters.’
Of course, your focus should be on the property’s advantages. But if there are any weaknesses or drawbacks, there’s no use trying to hide them. At the latest during the viewing, they will be discovered and the prospective tenants might back out on the spot. Put these points in your listing as well so everyone knows the deal. Take this example:
‘Due to the central location of this modern 2-room apartment, you do occasionally hear the sounds of the city and the traffic of the busy street nearby.’
You should always be honest in the rental process and not promise things that your property can’t deliver.
The following points should always be included in a property listing:
Consider this to be like the headline in a newspaper: the first line of a listing determines whether a prospective tenant will continue reading or not, so you should give particular attention to the title of your listing.
The following rule of thumb is helpful: a good title combines the most important information with the right emotions. After all, both are important for a potential tenant. For starters, they obviously want to know the facts about the property.
But they’re also looking for their dream apartment where they will love living and be happy. Show the prospective tenant what’s special about your apartment straight away in the title.
Here’s an example of a good title for a property listing: ‘Gorgeous and central 2-room apartment with a breathtaking view of the mountains.’
Or: ‘Your kids will love the garden! Large and bright family apartment with perfect infrastructure.’
In both examples, the owner states facts about the apartment while also appealing to people’s emotions.
Once a potential tenant has read the title of your ad and become interested, you should make sure that the description text generates even more enthusiasm for your apartment.
It’s helpful to take a structured approach: put the most important facts in the first two sentences (size, number of rooms, location, rent).
For example: ‘This family-friendly, 4-room, ground-floor apartment with a large garden and perfect infrastructure will be available from 1 October 2021.’
You can then describe all the characteristics of your property. This is where the features come into play. What is the condition of the bathrooms and how old is the kitchen? Is there a washer and dryer? How big is the apartment or house? When was it last renovated or modernised? What is the infrastructure like (transport connections, shops for everyday needs, schools, daycare, etc.)? Does the apartment have a parking space or a garage?
Finally, you can provide information about viewing dates and how to contact you.
Most prospective tenants will probably click through the photos of a property before reading the description. For this reason, you should have your apartment or house looking great before you take the pictures. It goes without saying that it should be clean and tidy. Ensure that there isn’t a lot of stuff lying around and make the rooms look appealing and inviting. Take as many pictures as possible and make sure that there are pictures of every room. Take photos in daylight to make them bright and welcoming. Pay attention to the composition of the photos: don’t crop part of a piece of furniture and present calm and orderly scenes. Make sure you put the toilet seat down before taking a picture. The garden and outdoor areas should also be presented in a well-tended and orderly condition.
Our tip: ensure that there are no personal items, valuables, photos or private information visible in the photos.
Choose the most attractive picture as the first image for your ad. Trust your instincts here: which photo would grab your attention and get you to take a closer look?
Floor plans contain important information for prospective tenants.
The more accurate they are, the easier it is for a tenant to determine whether the property is suitable for them. If you don’t have a detailed or legible floor plan, you can have a floor plan created online.
Step 4: Get to know the prospective tenants during the viewing
Whether you have an open house viewing setup (which is no longer uncommon in Switzerland) or you meet the prospective tenants individually, take advantage of the personal interaction to learn more about the future tenant before the rental begins. After all, as the landlord, it's important for you to have a pleasant rental relationship. Registration forms that you can have the prospective tenants fill out are also useful. Then you have the most important information in writing as well. This includes personal information, income information (work contract if possible), extract from the debt enforcement register and any references. You can also get information about the potential tenant from their previous landlord.
Step 5: Draw up a rental agreement
In Switzerland, landlords are not required by law to draw up a written rental agreement. If they were in agreement, parties could theoretically conclude a verbal rental agreement that would be perfectly valid. We advise against this, however. You should absolutely draw up a detailed and written rental agreement as soon as you have decided on a tenant.
The rental agreement for your property should include the following items:
- Exact description of the rental property inc. secondary spaces (e.g. garage) and communal rooms (e.g. laundry room)
- Rental start date
- Rental period (defined or indefinite)
- Termination conditions
- Gross rent or net rent plus utilities
- Any deposit
- Special agreements
Our tip: for your own security, you should demand a deposit. This can be no higher than three months’ rent. The amount and payment due date should be defined in the rental agreement. Note that you also have to set up a deposit account in which the deposit will be held during the rental period. The deposit must be strictly separate from your private assets.
Step 6: Apartment handover
Once you have decided on a tenant and they have signed the rental agreement, the apartment handover takes place.
Here you should be sure to make a thorough handover report documenting the condition of the apartment and any defects or damage. You can also take photos and add them to the report. It’s also important to state the number of keys handed over.
They must be returned to you at the end of the rental period.
Step 7: Your responsibilities as landlord
Once your property is in good hands and the tenant is settled in, the stage is set for a pleasant and unproblematic rental relationship. This is a good time to revisit your most important responsibilities as landlord:
Creating a deposit account:
The deposit for the rented apartment cannot be held among your private assets. You have to set up a separate account in which the money will be held.
You are required to give your tenant a utility statement once a year. This statement notifies the tenant of additional required payments or refunds of utility charges.
Your rental income is taxable and is subject to income tax, but you can deduct many costs arising from the rental (e.g. repairs, renovations, insurance premiums and mortgage interest). As the owner of an apartment or house, depending on the canton you may be subject to an additional property or wealth tax.