A successful investment in property requires that the right property is found, that the property is managed the right way throughout the investment period, and that the property is eventually sold for the right price. The saying goes that the 3 most important things when it comes to buying property are: Location, location, and location. Location is indeed very important. However, it is not merely the geography of the location – it is more the general market conditions encompassing a location which are of importance. The general market conditions include economic factors such as employment prospects in the location (i.e. current and expected future unemployment rates), inflation (i.e. current and expected future rates of inflations), and the overall economic trend or cycle. The economic trend – particularly the price trend for properties for the location – is of course very important.
For commercial property the quality of the renter is almost as important as the location (i.e. the market conditions associated with the location). The quality of the renter depends on a number of factors like the renter’s willingness to pay the right level of rent, the solidity of the renter (preferably a well established and well known company), and a long (preferably at least 10 years) rental contract.
Selling the property
Selling the property at the right price also means selling at the right time. When the right property has been purchased – naturally to the right price – and the property is managed in the right way and hence, continuously produces a positive cash-flow from rental income to the investors, then the investors are in a position to simply wait until the right time arrives. The right time is when the economic trend is high – i.e. when the property has appreciated substantially in value and the investors find it attractive to sell.
Managing the property
It is very important for the overall success of a property investment that the property is managed the right way throughout the investment period. The main focus of the management should be on reducing expenses and increasing the income for the property - and by increasing the income of the property the value of the property also increases.
Property can be an excellent long term investment providing the investor with a steady and positive cash-flow from rental income and a potential for growth in property value.
The successful outcome of a property investment depends on a number of factors:
- The property itself must be right with respect to its location and the general market conditions of that location.
- All the financial aspects regarding the property (i.e. purchase price, rental income, and mortgages) must add up from the very start - and also when projected in to the future.
- The investment structure should be optimal for the investors participating.
- The investor must have the finances to participate in a long term investment.
- It is of great importance that the management of the property investment continuously strives to improve the profitability of the investment – through refinancing, property improvements, and tax optimising.
The Swiss Confederation was founded in 1291 as a defensive alliance among 3 cantons (i.e. districts) in central Switzerland and in succeeding years 23 other cantons joined. The confederation is similar in structure to a federal republic with a high degree of cantonal independence and self regulation. Switzerland retains a strong commitment to neutrality.
Switzerland is a peaceful, prosperous, and stable modern market economy with low unemployment (approximately 3 %), a highly skilled labour force, and a per capita GDP (gross domestic product) larger than that of the big Western European economies. In recent years, the Swiss have brought their economic practices largely into conformity with the European Community to enhance their international competitiveness. The currency is Swiss franc (CHF). Switzerland remains a safe haven for investors, because it has maintained a high degree of bank secrecy and has kept up the franc's long-term external value. According to London’s Financial times, 40 % of all private assets worldwide are managed in Switzerland.
The population size of Switzerland is 7.500.000 – approximately 20 % being foreigners. The ethnic groups present in Switzerland are: German 65 %, French 18 %, Italian 10 %, Romansch 1 %, and other 6 %. German, French, and Italian are the 3 official languages in Switzerland.
Zurich is the largest city in Switzerland with 345.000 inhabitants and including its suburbs, Zürich also forms the largest conurbation with nearly one million inhabitants. Genèva has 179.000 inhabitants and Basel has 165.000 inhabitants. The capital of Switzerland is Bern and it has a population of 122,300. Only 16 cities have a population of over 30,000.