How do I rent out a property in Switzerland?

Rent properly in Switzerland – a brief guide

Renting real estate is our passion and our highest credo is to provide the highest level of security for our clients. We achieve this through an extensive checkup, the applicants.
In the following we would like to explain how the rental of real estate in Switzerland works. Swiss Luxury Real Estates will be happy to assist you with any questions you may have. Be on the safe side.

1. The inspection of the apartment with the future tenants

At the beginning of every rental is the viewing. It should already give the potential tenant a good impression, which is why we increasingly work with our home staging experts, especially for vacant properties.

This has the advantage that the future tenant is already given a visual idea of how the apartment might later look when occupied. This also has an impact on the rental price, which can usually be justified better in this way.

Home staging refers to the professional adaptation of rooms in an apartment or house to promote sales. Another advantage is that with professional execution, the tenants are willing to take over the furnishings immediately, which can also create added value.

For this purpose, Swiss Luxury Real Estates works with the best in the industry to provide our valued clients with the best possible quality.

Furthermore, we create a professional and classy presentation folder for our clients, so that we also stand out far from the competition and also leave a highly professional impression on the future tenant, which has a positive effect on the rental and sets you apart from competitors.

At the same time, a first pre-selection is already made during the viewing of the property, which is further refined in the subsequent process.

Within the inspection process we pay attention to the following things in a professional way:

1. perfect staging of the property

2. pre-selection of tenants

3. professional presentation of the property in the exposé

4. comprehensive questionnaire for further selection (self-disclosure)

We will be happy to assist you at any time with any questions you may have about renting out the propert
Best view in central Switzerland modern living room in clean look

2. The tenant selection

In order to make the right selection for you when renting out your property, we have created a seamless process that allows us to be prepared for all eventualities.

For example, the tenant must first fill out a detailed questionnaire and sign it legally and truthfully. Furthermore, we naturally check the creditworthiness very carefully.

Before that, however, we first discuss with our customers which target group comes into question for the customer. Here it is of decisive importance whether the customer is rather interested in a long-term letting or in a short-term one.

Whether families are preferred for the renting, or rather single marriages or couples. Pets are another issue.

These and many other topics are discussed by Swiss Luxury Real Estates in a personal meeting with the customer and then put together into an individual concept.

Further questions concern the rental period. Here, a decision can be made between a fixed-term lease or an indefinite lease. Both variants have their advantages and disadvantages and are individually adapted to the wishes of the landlord.

3. The self-disclosure

As already explained, Swiss Luxury Real Estates has developed a comprehensive questionnaire, which enables us to get a good estimation of the future tenant, which is enormously important especially with regard to the renting of a property. Of course we take care not to ask any inadmissible questions.

The creditworthiness is also checked extensively. This includes membership in a tenant protection organization, previous illnesses or diseases, smoking habits and the like.

Permissible questions are, of course, personal details, income, residence permit, pets, etc. These questions must be answered truthfully and signed in order to provide our clients with additional protection when renting their property.

In addition to the written self-disclosure, we also pay attention to the behavior of the potential tenant, in order to get an additional impression to maintain another component for the safe rental of the property.

4. The rent amount

Before signing a rental agreement, the question of the rent arises. The rent is the amount of monthly payments by the tenant to the landlord. It is decisive for the landlord’s return on investment.

It can be individually selected whether the ancillary costs are already included or whether they are calculated separately. We recommend the latter when renting out a property, as the ancillary costs can vary over the course of the rental period.

4.1 Calculation of the rent

To determine the rent, Swiss Luxury Real Estates compares on the one hand the costs that have to be spent for the property (cost rent) and compares them to the market rent (market rent) , which results from supply and demand.

This guarantees that a return on the capital invested is possible, provided that the property was not acquired above market level or economic slumps in the real estate market distort the rent.

The market rent is based on the local market rate. For this purpose, similar properties are compared in relation to each other.

Art. 11 para. 1 VMWG offers a definition: Local and neighborhood customary rents

“Decisive for the determination of the rental rates customary in the locality and neighborhood within the meaning of Article 269a letter a of the Code of Obligations are the rental rates for residential and commercial premises that are comparable to the rental property in terms of location, size, equipment, condition and construction period.”

It should be noted that when setting the rent, the value may not exceed the customary local rent to a significant extent:

Art 10 VMWG: Obviously translated purchase price

“An obviously translated purchase price within the meaning of Article 269 of the Code of Obligations is a purchase price that substantially exceeds the income value of a property calculated on the rent customary in the locality or neighborhood for similar properties.”

However, this does not apply to luxury properties or single-family homes with 6 or more rooms.

4.2 What is a reference interest rate

What must be taken into account when renting out real estate in Switzerland is the so-called reference interest rate, this currently amounts to 1.25% and is adjusted quarterly and is decisive for rent adjustments in the case of unlimited tenancies.

This is defined as follows: The reference interest rate is the interest rate at which interest is charged on mortgages in Switzerland. It is based on the average mortgage interest rate, which is determined by the Federal Office of Housing.

4.3 What does the reference interest rate mean in practice?

In simplified terms, the reference interest rate means in practice that rent adjustments can be made by the landlord if the interest rate increases by at least 0.25%.

If the interest rate decreases, the tenant can demand an adjustment, i.e. a reduction of the rent.

However, this does not preclude the landlord from passing on to the tenant increases in rent due to, for example, alterations or renovations, or due to increased operating costs.

5. The rental contract

Another key point when renting a property is always the rental contract. Swiss Luxury Real Estates has all contracts legally reviewed by our team of lawyers to ensure the highest level of security for our clients.

In Switzerland it is important to note that there are cantonal differences in the preparation of rental contracts, which we of course take into account and also have legally secured.

This also ensures that our rental agreements always include the latest legal changes.

It should be noted that Swiss law has already defined in great detail which rental agreements are legally compliant. For example, it is forbidden to prohibit tenants from smoking, but they are liable for smoke damage.

6. The rent deposit or also called rent deposi

When renting a property, it is also important to establish a rental deposit.

This corresponds to a financial security, which should cover damages in case of claims of the landlord against the tenant. In Switzerland, the rental deposit may not exceed three months’ rent.

We also recommend that the keys are not handed over until the deposit has been received in full.

It is up to the landlord whether he allows the tenant to have the deposit secured by a guarantee from a third party company.

7. The incidental expenses

Service charges are the costs associated with the use of the apartment. For example, the cost of hot and cold water, electricity, elevator, radio/TV fees and many more can be passed on to the tenant.

Likewise, an administration fee of 3% can be transferred. For a detailed list of all permissible and impermissible additional costs, please contact us directly.

Maintenance costs as well as acquisition and repair costs, on the other hand, must be borne by the landlord. The same applies to taxes and insurance costs, even if the lease agreement states otherwise.

Corresponding clauses are invalid. Nevertheless, it is necessary that all costs are listed in the rental agreement, as this cannot be made up without the tenant’s consent. In the case of heating costs, on the other hand, a mere mention is sufficient.

The tenant’s rights include the right to inspect the actual invoices for ancillary costs in order to verify their accuracy.