By investing in real estate equity in Switzerland, each shareholder becomes co-owner of a percentage of the entire property.
This new method of financing, which allows several shareholders to jointly invest in an investment property, offers significant advantages compared to owning an individual condominium.
Additional protections for investors
Thanks to this investment model, the co-owners receive their dividends (in proportion to their investment) and benefit from a dilution of the risk in case of vacancy of one or more apartments: notably if one of the tenants does not pay his rent or terminates his lease. The latter continue to receive the rent for the other apartments.
While in the case of the purchase of an individual apartment, the vacancy of the latter by the tenant, represents not only the integral loss of rental income for the owner, but also means the continuity of the payment of the charges.
It is thus easy to understand how the investment in participatory shareholding offers guarantees to co-owners.
Swiss real estate market: the vacancy rate continues to fall
In fact, in the current environment, the vacancy rate for residential rental real estate continues to decline, which can be explained by both the decline in construction activity and the increase in demand.
In fact, the Federal Statistical Office (FSO) published in 2022 the results of the count of vacant housing.
The vacancy rate decreased by 0.23% in one year, from 1.54% to 1.31%.
This represents a significant decrease of 13.8% or almost 10,000 units less than the previous year.
The regions of Ticino, Eastern Switzerland and Central Switzerland experienced the largest decreases in vacancy rates.
At the cantonal level, the vacancy rate was lowest in the canton of Zug, followed by the cantons of Geneva and Obwalden, with rates below 0.5% on June 1, 2022.
The rate decreased in 22 cantons, but increased in 4 others, including Jura which recorded the largest increase (+0.40 percentage points to 2.96%) and has the highest vacancy rate in Switzerland. The cantons of Solothurn, Ticino and Neuchâtel also recorded vacancy rates above 2%.
Taking into account a provision for loss on rent in our financial plans
At SIPA Crowd Immo, during the elaboration of the financial plan of our investment projects (and this, in order to ensure our investors the payment of their dividends, as close as possible to our estimates), we include a provision for loss on rent.
This is an amount “set aside” to cover potential losses in rental income that may occur.
This provision is based on an estimate of the risk of vacancies or other circumstances that could result in a loss of rental income.
It ensures that funds are available to cover possible losses in case of vacancy of one or more apartments for the time of its re-rental.
The goal is not to affect the return distributed to our shareholders.
Participatory real estate investment contributes greatly to the dilution of the risk of rental vacancy for co-owners. Moreover, the Swiss Federal Statistical Office confirms a downward trend in the vacancy rate for residential rental property in Switzerland. Therefore, SIPA Crowd Immo includes a provision for loss of rent when developing your investment project and ensures additional coverage without altering the dividends paid to its investors.
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