Real estate as an investment alternative to shares & Co.
Bonds, overnight money or even savings books are hardly profitable anymore, share prices have been on a roller coaster for years and gold is at a new high. On the other hand, money is cheaper than ever. No wonder that more and more wealthy Swiss and institutional investors are interested in real estate as a safe investment.
Not everyone is suitable as a real estate investor. Before investing in real estate, every potential investor should – in a relaxed atmosphere and on his own – answer the following questions:
- Am I able to invest my money in the long-term or will I need cash in the foreseeable future?
- Do I have the time to look at various properties offered to me by an estate agent?
- Can I finance any necessary refurbishment and renovation work and coordinate and monitor the necessary work with the craftsmen?
- Do I want and can I take care of the management of my property myself or who will do the daily business for me?
- Am I able to finance a complete property myself or is it perhaps more sensible to purchase only a part of the property?
If you have any doubts in answering these questions honestly, you should not read further. You must be aware that an investment in real estate is always associated with a certain risk. If you are a beginner investor, you can consider investing smaller amounts. However, by investing in a real estate bond, the risk can be spread over numerous properties and many tenants and thus be reduced.
The most important criteria is the location
Whether a real estate investment is worthwhile depends largely on the location of the property. Not every property is a profitable investment. Before investing in a property, you should at least consider these points:
- Properties in exclusive top locations in popular cities can be let much more quickly and at higher prices.
- Of course, the infrastructure of the property also plays an important role: If it is in a quiet residential street, are there shops for daily needs within walking distance, schools, kindergartens and a connection to public transportation etc.
- You should thoroughly examine the building substance and consult an expert if necessary. Extensive refurbishments and renovations can quickly and for years destroy the planned return on investment.
- Take a look at the neighbors in the house and the immediate surroundings. Not everyone wants to live in a hip environment with great nightlife.
- The property should meet all current requirements regarding energy consumption, environmental protection, etc.
- And of course, the price has to be right. Be careful when you discover a supposed bargain. A very low price compared to the average can be an indicator of a problematic property. If in doubt, consult an expert.
Numbers, numbers, numbers: Calculate your planned investment exactly
One advantage of real estate as an investment is that banks like to finance and lend money to real estate. Real estate generates a positive cash flow through rental income. The purchase of a property is expensive – not only in terms of the price of the property but also in terms of additional costs such as notary fees, brokerage fees, costs for registration in the land register, land transfer tax, etc.
Depending on the region, you should expect additional costs of at least 10% of the property purchase price. In addition, there may be the financing costs, i.e. the monthly repayments and interest payments, if you have made a loan. The renovation and ongoing repair costs, which are often due, should not be forgotten.
Looking at all these aspects, an effective net return of 2 – 3 % remains at the beginning – not more!
And this is where Le Bijou Real Estate Bond comes in place
The Le Bijou Real Estate Bond
At the beginning of May 2018, the Financial Market Authority Liechtenstein approved the issue of Le Bijou Real Estate Bond.
This allows international investors to invest indirectly in prestigious Swiss properties.
- Interest rate 3.0 – 3.5%
- Duration 2023/2025
- Total issue size up to CHF 30 million
- Minimum subscription amount CHF 1,000
Strong demand for properties with service
Real estate with comprehensive services is of particular interest to investors. These are operator models in which the properties are offered including a comprehensive service package. Starting with the weekly cleaning of the apartment, through the use of common areas such as a swimming pool with bar on the roof or a lounge on the top floor, services can be flexibly arranged, variable used and dynamically billed.
This chart proves that an exclusive equipment is also financially worthwhile for investors:
Differences in achievable prices compared to regular rental apartments (in percent)
Source: Wüest Partner (Inserate Plattformen)
Real estate becomes smart – and thus increases returns
Few topics have moved us in recent years as much as digitization. This has long since found its way into our private living area: We control the lighting in our apartments according to the mood as a matter of course; the music follows us every step of the way and of course we can also control roller shutters, blinds etc. from on the road using a smart device.
Le Bijou digitizes and virtualizes the classic concierge service
Each Le Bijou apartment is equipped with a 24/7 virtual concierge service called “James”. With this and the in-house app, guests can tailor their Le Bijou stay to their personal needs. Supported by Augmented Intelligence, James can make anything possible for any guest at any time. From a 24-hour concierge and shuttle service to private dining, spa and security services: Just ask and James will take care of the rest. This concierge technology available in each apartment is able to learn through interaction with guests. It works invisibly in the background and makes every Le Bijou stay a perfectly personalized, lasting experience.
As soon as a guest makes an inquiry, it is transmitted to our carefully maintained service provider directory. The first service provider to accept the request has the job. In this way, the needs of our guests are quickly and efficiently met by a partner we trust. Just like a traditional concierge – only better and more cost-efficient.
Enhance your property with Smart Home: reduce costs, increase sales
There are a number of ways to reduce the operating costs of a property with Smart Home. The most obvious possibility is that all readings such as electricity, gas, water, etc. are automatically sent to the administrator or the energy supplier. The recipients can process the transmitted data record automatically – the manual, error-prone reading an entry of consumption data is no longer necessary. With Smart Home, the ventilation and heating of the property can be monitored and controlled much more precisely. By monitoring the room humidity, mold growth can be prevented and expensive repairs can be avoided.
Declining costs increase the return on the real estate investment. In addition, there are numerous studies that prove that the value of a property can be sustainably and long-term increased through Smart Home.
Photos of selected Le Bijou Apartments: