If you are wondering about the concept of the rental management of an investment project in Switzerland, first of all, remember that it is essential to consider it as :
“A set of tasks dedicated to the management of a rented accommodation.”
It is common to assume that shareholders who have invested in therental property wish to delegate the process of managing their assets for various reasons: lack of time (especially for those who have invested in several investment properties), lack of expertise in the field, peace of mind etc.
Moreover, at SIPA crowd immo, we offer our clients the possibility to invest in real estate in Switzerland and benefit from a turnkey and customised service without worrying about the rental management of the property.
We collaborate with experienced partners, such as the real estate company Petignat & Amor responsible for the administrative and financial management of our investment projects. The latter, recognised locally, has a real experience in the field.
This allows our investors to receive their rental income annually without worrying about anything.
In this article, we propose to discover in more detail what rental management consists of and what advantages it can really provide to investors.
What are the elements of a rental management mandate?
There are different ways to invest in real estate in Switzerland, but if we were to briefly summarise, mentioning only investing in direct real estate (through investment properties), there is one point we all agree on: an investor wants to get a return on investment and minimise any risk of losing money and time.
It is precisely on this last point that he is confronted with a decisive question:
- Should I invest in a project(s) whose management is delegated or should I take over the management of the property(ies) in which I invest?
If he chooses the first option, he will be able to offload this mission. However, if he chooses to act alone, he will certainly opt for maximise its profitability, but will have to face some “constraints”:
Search & tenant management
First of all, the cost of rent is estimated. Then, a diagnostic file is established. Then, it is time to advertise the property and to study the applications received. When the ideal candidate is selected, the leasing agreement is drafted and signed by the different parties. L’inventory of fixtures on arrival can thus be realized.
It is important to keep in mind that rental vacancies can have a significant impact on the return.
The current management of the property
This involves the collection of rents and the issue of receipts at the end of each month. The annual rent is reviewed and the day-to-day management requires attention to small incidents or potential work in the context of repairs, leaks or damage.
It is also necessary to count the exchanges and the payment of condominium charges with the syndic, the regularisation of the annual charges and the property tax.
Administrative management:
This implies having to manage the tenant’s exit. When the latter decides to terminate his contract, a exit inventory of fixtures is carried out, during which the comparison with that of the entry can give rise to a count of the security deposit. The deposit is then returned.
This also requires the representation to insurance companies in the event of a claim or with the administrations in the event of a dispute.
The legal aspect
Legal management includes Litigation management with the tenant and the possible procedures in case of non-payment or degradation.
The advantages of rental management for investors
Although rental management has a price, it is important to remember that it is the peace of mind award.
It is important to realize that the rental management of a property is a profession in its own right and that delegating this part to expert professionals not only allows to save time but especially to avoid making strategic mistakes (management, administrative, legal…) that can have a significant impact on performance.
Another important point to consider is that when the property in which you invest / or that you wish to invest is far from your home or if you wish to diversify its investments and that these different properties are located in different cities or cantons.
The rental management mandate in Switzerland:
So, from a legal point of view, there are a few things to know:
A rental management mandate in Switzerland is legally considered as a contract and is regulated in Title 13 of the Swiss Code of Obligations.
In the sense of articles 394ss of the Code of Obligations (CO), the mandate can be terminated at any time and immediately.
If the mandate is terminated against time, the terminating party is liable for damages. However, it is customary to agree on a period of notice.
However, the notice period may not be recognised in litigation.
The costs to take into account: Real estate agencies generally charge a basic fee that covers day-to-day management and is calculated based on the amount of rent. Additional fees may be charged on a percentage basis for services such as finding a tenant or for specific work, as well as an hourly rate for legal procedures. It should be noted that all commissions and fees are subject to VAT..
The main advantage of investing in real estate equity is that this integral part is delegated to an experienced partner and that the above-mentioned costs are taken into account in the financial plan. The shareholders involved in the project therefore have absolutely nothing to deal with from this point of view. They can therefore invest in real estate serenely, quickly and benefit from a turnkey service.
If you too would like to collect, from now on, your dividends paid once a year on your bank account (from the rental income of our buildings), we invite you to register on our waiting list to be informed in priority of thelaunch of our next investment projects.
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