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Switzerland: How buying real-estate can kill you financially/reasons for stocks

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Re: Switzerland: How buying real-estate can kill you financially/reasons for stocks

#81

Post by iagooar »

s3nnyy wrote: post #40
iagooar wrote: post #39

Yeah Switzerland is great as long as you don't have children. Once you get a child, well, you're out of luck. Childcare in Switzerland is the craziest expense I've seen in my life, where having your kid looked after for 5 days a week will cost you 2-2,5k CHF / USD per month! And if you have a second child, they might give you 10% discount. So around 4,5k USD per month for 2 kids. It's madness! Besides that, you will…

OP here. I disagree with everything you said. > having your kid looked after for 5 days2-2,5k CHF / USD per month! Yes but only when your kid is 2-3 years old. After that kindergarten is free. Superb elementary school, high-school is free; and on top Uni-Zurich and ETH, the MIT of Europe, is also almost free (costs like 500$ a semester). > Besides that, you will need to leave your shared apartment and go looking for…

Of course you disagree. You literally make money off people who want to buy into the "Swiss dream". While certainly it is a great country to live in, it has its shortcomings. What I'm pointing out might not be a big deal for many people who are not planning to have children. But for others it sure might be a deal breaker.

> Yes but only when your kid is 2-3 years old. After that kindergarten is free.

Yeah, you just forgot to mention that kindergarten starts at the age of 4, and is not 5 days a week, the whole day. It's 4 days a week, 3,5 hours a day. The rest still needs to be paid at the same rate I mentioned before. So you are talking here without really knowing your facts.

> Why? You're probably referring to some regulations. Well, if you have a wife and one kid, you can legally even live in a 1-bedroom apartment (formula for legal limit of grown-up people per apartment is "# of people = # of rooms + 1" - source p. 29: https://www.ekm.admin.ch/dam/data/ekm/dokumentation/material...)

So you are basically saying that someone who earns a shit-ton of money should live in a 1 bedroom apartment with their partner and child? I just can't answer to that...

Re: Switzerland: How buying real-estate can kill you financially/reasons for stocks

#82

Post by iagooar »

EADGBE wrote: post #78
iagooar wrote: post #39

Yeah Switzerland is great as long as you don't have children. Once you get a child, well, you're out of luck. Childcare in Switzerland is the craziest expense I've seen in my life, where having your kid looked after for 5 days a week will cost you 2-2,5k CHF / USD per month! And if you have a second child, they might give you 10% discount. So around 4,5k USD per month for 2 kids. It's madness! Besides that, you will…

Yeah, I'm not sure daycare anywhere is cheap. 3 kids, US Midwest, 36k/yr for daycare. I'm honestly looking at it as a huge bonus (paid to myself) after 4-5 years. It keeps me from crying.

It is cheap in Germany. Until this year it's been less than 300€ / month. Starting in 2018, in Berlin, daycare is going to cost you a whopping 0€! So it is possible, if the country and the people really want it.

Re: Switzerland: How buying real-estate can kill you financially/reasons for stocks

#83

Post by joshuaheard »

s3nnyy wrote: post #47
joshuaheard wrote: post #44

A couple flaws in the article. If you don't buy a house but buy stocks, you will pay rent. According to the numbers in the article, this nearly cuts the stock return in half. Also, the article states you will lose money on the depreciation of the building, but does not take into account the appreciation of the land. The land appreciation is highly leveraged, as well, since most people typically place only 20% down on…

OP here. I think I wrote: > "the land doubled in value and is worth 200k CHF" Even if you add up not having to pay rent and possible sale of the house (on which y) you would still end up much better with stocks: House: You buy the house, after 30 years let's say the value stays the same: You own 500.000 CHF worth of house. (Assuming you had no repairs and the value stayed the same, which is VERY optimistic). You sell…

I didn't get into tax treatment because I don't know Swiss tax rules. In the U.S., you pay the same capital gains on both a stock sale and house sale (and a personal residence sale may have the tax waived). You also get favorable tax treatment on a home, for instance, the mortgage interest tax deduction. If you buy a rental house, that is a tax deduction bonanza! Nearly everything is deductible. It's true the house depreciates. For a rental house, this depreciation is tax deductible. However, no real write-offs for a stock sale.

In the U.S., there will be gains on real estate since the average real property appreciation rate is 5-10%, about the same for stocks. But, you must look at cash on cash. I buy a $500k house for $100k cash. You must calculate the stock return on the $100k. However, you calculate appreciation for real estate on the total value of the land and house.

tldr: 5x appreciation on house vs. stock, with tax write-offs and no rent.

Re: Switzerland: How buying real-estate can kill you financially/reasons for stocks

#84

Post by s3nnyy »

iagooar wrote: post #81
s3nnyy wrote: post #40

Earlier quoted context omitted.

OP here. I disagree with everything you said. > having your kid looked after for 5 days2-2,5k CHF / USD per month! Yes but only when your kid is 2-3 years old. After that kindergarten is free. Superb elementary school, high-school is free; and on top Uni-Zurich and ETH, the MIT of Europe, is also almost free (costs like 500$ a semester). > Besides that, you will need to leave your shared apartment and go looking for…

Of course you disagree. You literally make money off people who want to buy into the "Swiss dream". While certainly it is a great country to live in, it has its shortcomings. What I'm pointing out might not be a big deal for many people who are not planning to have children. But for others it sure might be a deal breaker. > Yes but only when your kid is 2-3 years old. After that kindergarten is free. Yeah, you just f…

>So you are basically saying that someone who earns a shit-ton of money should live in a 1 bedroom apartment

No, I am not telling anybody to do anything. I am pointing to the existing legal possibilities because Zurich's landlords are arrogant and sometimes write clauses in their rent-contracts that "break" Swiss law ("only 1 person can live here"). I am trying to highlight that Zurich's jurisdiction is renter-friendly and laws are applied rigorously.

You can calmly rent-sign a contract with weird clauses, because they are invalid, so you can break them and the landlord can't kick you out for it. Worst case is you get infront of the "Schlichtungsbehörde" which is a pre-step before the court, where a volunteer-landlord, volunteer-renter-representative and a neutral party will decide over a dispute quickly (and cheaply). So please make sure you are member of mieterverband.ch, if you live in Zurich.

Re: Switzerland: How buying real-estate can kill you financially/reasons for stocks

#85

Post by EADGBE »

iagooar wrote: post #82
EADGBE wrote: post #78

Earlier quoted context omitted.

Yeah, I'm not sure daycare anywhere is cheap. 3 kids, US Midwest, 36k/yr for daycare. I'm honestly looking at it as a huge bonus (paid to myself) after 4-5 years. It keeps me from crying.

It is cheap in Germany. Until this year it's been less than 300€ / month. Starting in 2018, in Berlin, daycare is going to cost you a whopping 0€! So it is possible, if the country and the people really want it.

As long as we're not passing up quality, I'm all for this.

Re: Switzerland: How buying real-estate can kill you financially/reasons for stocks

#86

Post by notadoc »

s3nnyy wrote: post #45
notadoc wrote: post #34

> While in the US you have regions where people make $50k a year and a house costs $50k — $100k LOL, not on the coastal states. If it's the west coast, people earn 50k while starting house prices are 500k+

In the article, I explicitly mention cities like San Antonio, Houston etc. and link to my source: https://www.numbeo.com/property-investment/rankings_current....

Texas is on the Atlantic gulf coast, it is not on the west coast of the USA.

As far as Houston goes, look for yourself:

https://www.zillow.com/houston-tx/houses/

A dilapidated tear down in an undesirable area is about what you'll get for under $100k in Houston

https://www.zillow.com/homedetails/6858-Evans-St-Houston-TX-...

Anyway, on the west coast of the USA housing is extraordinarily expensive and many multiples of median income.

Re: Switzerland: How buying real-estate can kill you financially/reasons for stocks

#87

Post by JamalMolla »

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