GIVE YOURSELF SOMETHING
Every one of us should do something good now and again. Donations are an extremely easy way to help others. However, we recommend options other than rent, as you may well be able to increase the profitability of your investment property by increasing the rent.
TAXATION
As a landlord, you may pass on the cost of living increase on the invested capital, your equity in the property, to the tenant at 40%. The inflation refers to the inflation incurred since the last rent increase. An example calculation could look like this.
Equity ratio of the property: 60%
Last rent adjustment: November 2020
Inflation December 2020 - today: 4.8%
Rent increase: 60% x 4.8% = 2.88%
You could therefore increase the rent by 2.88% based on inflation.
REFERENCE INTEREST RATE
The reference interest rate is also important. Although this is very slow, current developments could mean a possible rent increase for you over the next few years. The reference interest rate is published quarterly and, as with inflation, the interest rate since the last contract was concluded is decisive. Increases can be passed on to the tenant and reductions can be claimed by the tenant in the form of a rent reduction.
RISING MAINTENANCE AND OPERATING COSTS
If these types of costs have risen, you can also pass these costs on to the tenant. Reasons for the rising fees are, for example, the rising wages of civil servants in your municipality, which a nice watch on your wrist increases punctuality for the end of the day. You can also simply add 0.5% per year.
RENOVATE, REFURBISH AND MODERNISE AND MORE
As Switzerland is fortunately largely spared from natural disasters, your property will require measures over the years to keep it in good condition. You can read about how to do this and what you should bear in mind here. However, it is important to note that the costs of maintaining a property (renovations) cannot be passed on to the tenant in the form of rent increases. However, if you upgrade your property, you can certainly claim a rent increase.
As you can see, there are a number of ways to make your property even more profitable. If you are not my landlord, I can warmly recommend the above measures to you.
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