Do you own an apartment or a house, but do not live in it? Then you have the possibility to rent out the apartment or house. There are a few things to consider. Among other things, the costs and the administration. What you should consider when renting out your apartment, you can learn here.

When is it worth renting out an apartment?

As a landlord, you should first be sure whether the apartment or property is really suitable for renting. When renting out a house, the returns should be sufficiently high. But renovations in the future should not be forgotten. When renting out the apartment, not only should your running costs be covered, but a profit should also be made.

Not to be forgotten is the time involved, which plays an important role in renting. As a private landlord, you need to have time for viewings and the apartment handover. Against payment of a fee, an administration takes over the rental effort for you.

How much renting an apartment pays off for you depends on several factors:

  • How much are the service charges that fall on the owner?
  • How good is the condition of the apartment?
  • How high will the rent be?

How attractive is the apartment in the region? How many empty apartments does it have?
Rather sell the apartment?

If you want to sell the apartment, you should not rent it. Selling rented apartments is more difficult because the buyer cannot move in immediately. The new owner can give notice to the tenant, but the legal notice period must be respected. Thus, it also has an impact on the real estate valuation whether the apartment is rented or not.

Find the right rental price for your apartment

In principle, landlords are interested in a high rent so that they can achieve a high return on their rent. However, there are legal restrictions on the rent, which protect tenants from abusive rents.  The legal basis on the subject of abusive rent is set in the Code of Obligations by Art. 253b. If the rent is within the range of the rent customary in the locality and neighborhood, the price is not abusive.

That’s why most landlords base their prices on the rents of comparable apartments in the same region or district. It is best to compare the characteristics of comparable apartments with your property. For example, the location of the apartment may result in a lower rent if it is on a busy main street or near a railroad track. On the other hand, a quiet area with a beautiful view justifies a high rent.

As an alternative, you can also bring in a real estate agent to help you find a rent, who is very familiar with the local housing market and tenancy law.

Rent out an apartment: With or without the help of a real estate agent?

When looking for suitable tenants for your property, you can either take matters into your own hands or hire a real estate agency. A real estate agency takes over some tasks for you. Furthermore, the brokerage office supports you in case of possible questions or ambiguities.

What points you should determine for yourself in advance:

Some questions you should clarify for yourself in advance either way: What is the maximum number of people allowed to live in the apartment? Do you want to rent the apartment only for a short period of time, because you are going on a trip around the world, or for the long term? Do you want pets in your apartment or not?

These points should already be determined before the first viewing appointment. When going through a real estate agent, you should communicate with them.

Renting without the help of a broker:

A private apartment rental involves a lot of work and time, which is often underestimated by owners. Some of the tasks you will have to perform include:

  • Set rental price
  • Advertise apartment with suitable photos
  • Draw up rental contract
  • Organize viewings
  • Handing over the apartment

For each of these tasks, you need a relatively large amount of time. Therefore, in many cases, it makes sense for landlords to hire an experienced broker.

Renting with the help of a real estate agent:

Experienced brokers have already assisted many landlords in renting. Thus, these are professionals you can rely on. Brokers will take over or assist you with the following tasks for a fee:

  • Finding a reasonable rent for the apartment.
  • Advice on the rental contract.
  • Careful selection of the tenant.
  • Answering questions about tenancy law issues

Create an advertisement for apartment rental

On most real estate platforms you can place an advertisement for your apartment. . For the private rental of an apartment you pay a different price, depending on the circumstance.

Established platforms charge a bit more. However, these have a higher number of users, which increases the chance of finding a suitable tenant. There are also platforms where you can advertise your apartment for free, such as

As a rule, you must always provide the following information about the rental property:

  • Type of object (apartment, vacation domicile, shared apartment, etc.)
  • Number of rooms
  • Size
  • Price: net rent and gross rent, additional costs
  • Pictures of the apartment
  • Your contact details
  • Description of the object

What to consider when viewing the apartment?

With the apartment viewing, you should find out whether a person is suitable as a tenant or not. In order for prospective tenants to get a good impression of your apartment, it is worth doing any repairs before the first viewing.

In principle, you have the option of a group viewing or individual appointments with interested parties. The organization of the viewing depends on your personal preferences and the number of prospective tenants.

The individual visit is better for getting to know each other personally. Group viewing, on the other hand, can save you a lot of time and may get several applicants at the first appointment.

Provide copies of an application form at the apartment tour for prospective tenants. This will give you the most important information from prospective tenants. It may also be that they have already prepared an application dossier and have it ready for you. In this case, you should check carefully that all the important documents are there.

Error avoidance in tenant selection:

Rent fraudsters can cause large rent debts. If a tenant can’t pay, then that brings significant financial and time costs to you. Therefore, when selecting a tenant, it is important to take a close look at the potential tenants.

You should already ask the prospective tenant in the application form about income, personal details, debt collection register extract, and references. Of course, it is also worth asking the previous landlord whether they have paid on time and left a good impression. If it turns out that the prospective tenant has moved often, you should ask for registered excerpts of the previous residences.

💡 Advice:
Rent out the apartment only with a rent deposit, which is stated in the rental agreement. This serves as security in case the tenant cannot pay the rent or the service charges. The tenant gets the deposit back after the end of the tenancy.

Suitable tenant found – What should the tenancy agreement look like?

The rental contract can also be concluded orally and is not bound to any particular form. Nevertheless, form rental contracts are mostly used.

Elements that should definitely be regulated in the lease:

  • Rental parties: The persons/parties renting out and those renting should be recorded in the rental agreement.
  • Rented object: Here you record what you, as the landlord, allow the tenant to use. Do not forget to list rooms such as cellar, attic, laundry room, etc.
  • Rent and ancillary costs: Normally, the monthly rent is recorded. In addition, it is also described how this is composed: Net rent plus ancillary costs.
  • Rent deposit: It only has to be paid if it is expressly agreed in the rental contract. You must record the amount that tenants are required to pay as a security deposit (deposit). The amount of the rental deposit can be a maximum of 3 months’ rent.
  • Lease term: Lease agreements can be concluded for a definite or indefinite term. As a rule, the contract is concluded for an indefinite period. Then the tenant or the landlord can give notice of termination if certain rules and deadlines are observed.
  • If you agree that the tenants may sublet the rented apartment, this must be stated in the rental agreement.

How should the handover of the apartment be carried out?

After the rent deposit and the rent for the first month have been paid, the keys for the apartment should be handed over to the tenants. The handing over of the keys can also be done before, but at least the payment of the rent deposit should be required in advance as security.

You create a protocol for the handover of the apartment. This protocol documents the handover. Above all, defects and damages are noted in detail. In the end, the acceptance protocol should be signed by both parties – tenant and landlord.

How much are the taxes for rental income?

Rental income is taxable income and you have to pay income tax on it. It does not matter whether you rent out the apartment permanently or only for a short period of time. As soon as you receive rent from the tenant, you have to pay tax on the rental income as income tax in your tax return.

💡 Important:
When subletting, one does not receive any income, but one’s own rent payment is reduced. Therefore, as a tenant, one does not have to declare the rent of a subtenant in the tax return.

As a landlord, you can deduct many rental costs from your taxes with these tax tips:

  1. Keep all proof of payment receipts. Otherwise, you will not be able to deduct any costs from your taxes. These include mortgage interest, maintenance and utility costs.
  2. If you implement value-preserving measures, such as repairing the heating system, you can deduct these costs.
  3. Spread out major renovations over several stages. With this distribution, you can deduct the costs from the rental income over several years.
  4. You can also claim the expenses for insurance premiums as expenses. For example, property tax.

In the tax return, you have the option of declaring the actual costs or you can use the flat-rate deduction. In most cantons, this is 20% of the gross rental income. You can find out which regulations apply in the canton in which you live in the tax return guide.

Additional taxes as a homeowner:

As a house or apartment owner, you must pay other taxes that are due annually:

  • Property tax: whether this is charged and how much this tax is, is regulated in the cantonal tax regulations.
  • Wealth tax: Taxes must be paid on the taxable value of the property (apartment, house).