Buying apartment and renting out rooms - ideas?

[maxysu]

Image:
http://i.imgur.com/A7ed1gT.jpg

Details:
https://www.homegate.ch/kaufen/106205682


The buying price of one apartment I am looking at right now is at least 440k CHF (it will be an auction) and twenty years ago the apartment was bought for "more than 300k CHF but less than 400k CHF" (The current owner does not want to disclose the buying price from 1993). It looks like the price for the apartment has risen only a little, which surprises me.

At the moment interest rates on such loans are low .5% - 1%. If the interest rates rise to 5%, my monthly loan payment would rise to 1600 CHF / month. This is also the rent the current family that lived there paid. Everything in there is old / from 1970.

However, airport and city are not too far and there are many jobs both in the city and at the airport, so I believe I can rent out two rooms for 500 CHF - 700 CHF each. Theoretically, if really the demand for rooms is high enough, I could pay little rent / live for free and own an apartment in ten years or less. However, I have to install at least one wall or a door to make "a real room" out of the living room, and I have no clue how much that will cost.

The apartment comes including two parking spots for cars and a piece of the garden where one could put a trailer in the summer and rent it out (the garden is actually meant for gardening).

Any ideas no this?

Full buying information about the apartment

[saving-10-years]

I presume you have checked that your lease (or whatever) would allow you to sublet and park a trailer in the garden which you could let. I imagine that the latter could be challenged in particular because its visible to others and it could affect their privacy in their gardens? You should also be sure that the change in configuration in the lounge will be within building regs.

MOST OF ALL don't be fooled that the auction guide price is the price that a property will sell at. If you can you should look at what other property guide prices and actual sale prices have been. I've known actual prices (what was actually paid at auction) be over £200k more than the catalogue guide price.

If the price is accurate (seems to reflect the price of these apartments sold recently) the other thing to check is that there are no expensive external works that the apartment owners will have to pay for within the next few years. That could be a reason to sell at auction, to get out of this high charge on the horizon. Talk to someone who has an apartment there if you can.

Good deals can be had at auctions (in the UK at least) but often the properties sold that way have something that might prevent a more normal sale, where the buyer might get cold feel when they find something non-obvious about the property or plans for the area. You really need to do a lot of homework. Good luck.

[maxysu]

"properties sold that way have something that might prevent a more normal sale"

I assumed auctions are the default way to sell property? If no, why not? The seller is interested in maximising the price and an auction is a good way to do it.

[Ayanka]

@maxysu, unless they do a very different job in Switzerland, doing an auction is generally for bank owned building, short sales aka problem buildings that have to be sold now. You can get a higher price at an auction, but possibly also a way lower price. Read through all of the paperwork before going to the auction. There is something fishy about this.

[maxysu]

So now I found a way better apartment much closer to the city, for 580k chf however. There i will also get 100% tenants and can charge more. However the apartment apears to be worth only 500k chf, hence it is a bit overpriced.