You have decided: you want an investment property. Perhaps you have already studied some listings, or maybe you already have a specific property in your sights. Now comes the decisive part: the structured analysis. The difference between a good and a bad investment rarely comes down to luck -- it comes down to the diligence you apply before the purchase. This checklist guides you step by step through the entire buying process.

Is an Investment Property Still Worth It?

The question is frequently asked, and it is justified. Interest rates have risen in recent years, purchase prices in many Swiss regions are high, and political pressure on the rental market is increasing. Nevertheless: residential property in Switzerland remains a solid capital investment when done right.

What can you realistically expect? For a good-quality multi-family building in a mid-sized Swiss city, gross yields today typically range between 3% and 4.5%. In prime locations such as Zurich or Geneva, even lower; in peripheral locations, sometimes higher. What matters, however, is not the gross yield alone, but what actually remains at the end: net yield, return on equity, and cashflow give a far more realistic picture.

In short: Yes, investment properties are still worth it. But only for investors who diligently assess, calculate realistically, and take no shortcuts.

Checklist: Step by Step

1. Clarify Budget and Financing

Before you even look at a single property, you need to know what you can afford. Sounds obvious -- but it is not.

Equity: To purchase an investment property, Swiss banks typically require at least 25% equity of the purchase price. For a property at CHF 1,200,000, that means CHF 300,000, and this amount must come entirely from your own funds (no pension fund withdrawal as with owner-occupied homes). On top of that, there are transaction costs: notary fees, land registry entry, and potentially transfer taxes, which vary by canton.

Affordability: Equity alone is not enough. The bank also checks whether you can sustain the ongoing costs long-term, even at a significantly higher interest rate than today. Under the one-third rule, the imputed annual costs (interest, amortisation, maintenance) may not exceed one-third of your eligible income. For investment properties, a portion of the rental income is credited. How exactly this calculation works and what banks pay particular attention to is explained in detail in the article Affordability for Investment Properties.

Bottom line: Run through your budget before studying listings. Otherwise, you waste time or fall in love with a property you cannot finance.

2. Choose the Location

The location of a property is the most important factor for long-term value stability and low vacancy risk. It sounds like a truism, yet it is the most common area where investors cut corners because they can buy more cheaply elsewhere.

What makes a good location?

Good public transport and road connections
Adequate infrastructure (shopping, schools, healthcare)
Stable or growing population
Low vacancy in the rental market (check the cantonal vacancy rate)

Urban vs. peripheral: Urban locations offer higher demand security and lower vacancy risk, but also higher purchase prices and thus lower gross yields. Rural locations can offer higher yields but carry more risk from structural change or population decline.

Tax considerations: The cantons differ significantly. The transfer tax (Switzerland's property acquisition tax) does not exist in some cantons (e.g., Zurich), while in others it amounts to up to 3% of the purchase price (e.g., Fribourg, Valais). Wealth and income taxes also vary considerably and noticeably affect your net yield after tax.

3. Analyse the Property

You have found an interesting location and have a specific property in mind. Now it is time for the detail work.

Year of construction and condition: Older properties are often cheaper to purchase but can entail high renovation costs. Key areas to check: condition of the roof, facade, heating system, windows, electrical installations, and plumbing. A building constructed before 1980 should always be accompanied by a building survey. Budget maintenance provisions of 1% to 1.5% of the building value per year.

Tenant structure: Who lives in the building? Long-term tenancies mean stable income and low turnover -- that is valuable. High tenant turnover increases the vacancy rate and creates ongoing costs (listings, renovations, vacancy). Ask for the current lease agreements and check how long the tenancies have been in place.

Current rent vs. market rent: Is the property rented below market rate? This can represent hidden yield potential, but also a risk if increases at tenant turnover are only possible within the legal framework. Use the immometrics yield calculator to compare market rent and current rental income and see how this affects your yield.

4. Calculate the Yield

The centrepiece of every investment decision. Anyone who only looks at the gross yield is buying a pig in a poke.

The three metrics you need to know:

Gross yield: Annual rent / purchase price. Quick to calculate, but not very informative.
Net yield: Additionally accounts for all running costs (maintenance, management, insurance, vacancy). Only here do you see what the property truly generates.
Return on equity: Relates the cashflow after interest costs to the equity invested. This is the return that directly concerns you as an investor.

How these three metrics are calculated and why you need all three is explained in detail in the article Gross Yield, Net Yield, Return on Equity. The methodological foundations can also be found in the article Yield Calculation for Swiss Real Estate.

Cashflow analysis: At the end of the day, it is the cashflow that determines whether the property sustains itself or whether you need to top up money every month. Calculate: rental income minus mortgage interest, minus amortisation, minus ancillary costs and maintenance, minus management, minus vacancy reserve. Is there anything left? How much? The article Calculating the Cashflow of an Investment Property shows you how to set up this calculation step by step. Or use the immometrics yield calculator directly -- there you can see all metrics at a glance.

5. Conduct Due Diligence

Before you sign the purchase contract, there is a series of documents you must review.

Land register extract: Shows who the owner is, whether easements (e.g., rights of way, utility rights) or liens (e.g., existing mortgages) are registered. Easements can significantly restrict the use or value of the land. The land register extract is publicly accessible and can be requested from the competent land registry office.

Condominium ownership (STWE): Are you buying a condominium as an investment? Then you additionally need the building specification and the division regulations, which govern the rights and obligations of the owners' association. Check: Is there a renewal fund? How high are the contributions? Are major renovations pending?

Contaminated sites register: Every canton maintains a register of sites where contaminated soil is suspected or confirmed. Check whether the plot is listed, as remediation obligations can be expensive and are not always visible at the time of purchase.

Zoning and land use planning: Check with the municipal building authority whether the property is in a secure residential zone and whether planned construction projects in the area could affect its value.

6. Finalise the Financing

You have analysed the property, checked the yield, and completed due diligence. Now it is time to structure the financing.

Obtain multiple offers: Never go into negotiations with just one bank offer. Terms vary significantly depending on the institution, term, and your creditworthiness. Insurance companies, pension funds, and mortgage brokers can also offer competitive rates.

Fixed vs. SARON: Fixed-rate mortgages give you planning certainty; SARON mortgages are more flexible and have historically been cheaper, but carry interest rate risk. For investment properties, a mix is often advisable: one portion on SARON for flexibility, one portion at a fixed rate for security. Have your bank calculate both options.

Amortisation plan: Banks typically require investment properties to be amortised, at least down to a loan-to-value ratio of 65%. Check which amortisation method is more tax-efficient (indirect amortisation via pillar 3a is more attractive for owner-occupied homes than for investment properties).

The Most Common Mistakes When Buying

Even experienced investors make the same mistakes repeatedly. Here are the most important ones:

1. Only looking at the gross yield: The listing shows 4.5% gross yield -- sounds good. But after deducting management, maintenance, vacancy reserve, and ancillary costs, the net yield may drop to 2.5%. Anyone who only looks at the top line buys too expensive.

2. Underestimating vacancy: Nobody likes to factor in vacancy. But a realistic scenario should always include 2% to 5% vacancy, depending on location and tenant structure. Omitting this systematically overstates your cashflow.

3. Forgetting maintenance costs: A property in good condition still costs money. Heating replacement, roof renovation, new kitchens at tenant turnover -- it adds up. Anyone who does not plan reserves will sooner or later face liquidity problems.

4. No reserve for the unexpected: Water damage, legal disputes with tenants, regulatory requirements -- surprises always come. Keep at least 3 to 6 months' rent as a liquidity reserve.

5. Ignoring tax implications: Many investors forget that rental income must be taxed. At the same time, mortgage interest and maintenance costs are deductible. Anyone who does not factor in the tax side has an incomplete picture of the actual yield. The article Taxes on Investment Properties explains all the relevant points.

6. Emotional decisions: An investment property is not a home. A beautiful view and a cosy courtyard are relevant to tenants, not to your yield calculation. Decide with the numbers, not with your gut.

Frequently Asked Questions

Is an investment property in Switzerland still worth it?

Yes, but with caveats. Margins are tighter than five years ago, and the demands on diligence have increased. Investors who carefully assess, calculate realistically, and bring a long investment horizon can still achieve attractive yields with Swiss residential property.

How much equity do I need?

At least 25% of the purchase price, entirely from your own funds. Additionally, transaction costs (notary, land registry, transfer tax) can amount to 1% to 4% of the purchase price, depending on the canton.

What yield can I expect?

Gross yields currently range between 3% and 5%, depending on location and property quality. After costs and financing, a return on equity of 4% to 8% often remains, depending on how favourably you buy and how much leverage you use. Calculate both scenarios with the immometrics yield calculator.

What are the biggest risks?

Vacancy, rising interest rates, maintenance costs, and regulatory changes in tenancy law. Investors who manage these four risks -- through good location, solid financing, realistic reserves, and diversification -- are well positioned.

Buying an investment property is one of the most complex financial decisions you can make as a private individual. This checklist helps you proceed in a structured manner and not overlook any important points. Use the immometrics yield calculator to run through all the metrics of your target property in a few minutes before you decide.

Buying an Investment Property: Checklist for Investors