Services immobiliers
Estimation
3-room condominium in Geneva at CHF 850'000: 2.9% net yield
A 3-room condominium (PPE) at CHF 850'000 in Geneva: 4.1% gross, 2.9% net. Step-by-step calculation, leverage effect and variants for Champel, Onex, LDTR…
Table of contents
The starting assumptions
Here is the case, with figures set out as assumptions, not guarantees. A Geneva investor has CHF 250'000 of equity. He is hesitating between buying a property to let and investing this capital elsewhere. The result of this calculation: 4.1% gross yield, 2.9% net yield, and a return on equity that depends entirely on the mortgage rate.
The assumptions of the case:
- Property: 3-room condominium (PPE), 62 m², Geneva, mid-range residential district
- Purchase price: CHF 850'000, or about CHF 13'700/m²
- Market rent: CHF 2'900 per month, or CHF 34'800 per year
- Equity: CHF 250'000, of which CHF 100'000 comes from a pledge or the 2nd pillar depending on the file (to be validated with the bank)
- Financing: CHF 600'000, i.e. a loan-to-value ratio of 70.6%
- 10-year fixed mortgage rate: 2.2% (assumption, to be confirmed with your bank)
- Condominium charges borne by the owner: CHF 3'600 per year, including the renovation fund
- Vacancy rate: 1 month out of 12 over the holding period
- Routine maintenance not rechargeable to the tenant: CHF 1'700 per year
- Existing mortgage note (cédule hypothécaire) of CHF 500'000, to be taken over or created
The gross yield formula is stated once: annual rent divided by purchase price. Here, 34'800 divided by 850'000 gives 4.1%. The net yield, for its part, deducts charges and vacancy before dividing by the total acquisition cost. Two distinct figures, and it is the second that matters in the decision.
Reference price: for condominiums in Geneva, allow CHF 13'500/m² on average in 2026, but a 20% gap between Champel and Onex. The price per m² in this case is therefore in line with the average, with no district premium.
From purchase price to rent collected: the calculation step by step
First step: the real acquisition cost. The advertised price is not enough. Geneva transfer duties add about 3% to the purchase price: CHF 25'500 on this property, payable in cash. Added to this are notary and land registry fees, estimated here at 0.5% of the price, i.e. CHF 4'250, as well as mortgage note fees, to be checked depending on the structure. Assumption adopted: CHF 32'000 of acquisition costs in total. Total cost: CHF 882'000.
Second step: the gross yield. CHF 34'800 of annual rent for a price of CHF 850'000: 4.1%.
Third step: the rent actually collected. One month of vacancy brings the amount collected down to CHF 31'900.
Fourth step: non-rechargeable charges.
- Owner's condominium charges: CHF 3'600
- Routine maintenance: CHF 1'700
- Total: CHF 5'300
From CHF 31'900, we deduct CHF 5'300: the operating result reaches CHF 26'600 before interest. Relative to the total cost of CHF 882'000, it gives 3.0%. Prudently rounding up ancillary costs (building insurance, management fees at 4% of rent collected in some cases), we retain 2.9% net yield, before mortgage interest and before tax.
Fifth step: interest. On CHF 600'000 at 2.2%, the annual charge amounts to CHF 13'200. About CHF 13'400 then remains before tax. This amount is the real income generated before taxation, and it does not cover amortisation.
Sixth step: taxation. In Geneva, rental income is added to taxable income. Mortgage interest, maintenance costs and condominium charges are deductible, within the limits set by the cantonal tax administration. If the property is owner-occupied, the imputed rental value is taxed instead. The effective tax depends on your marginal rate, which can reach a high level on high incomes. This calculation does not quantify it: it is a matter for a tax specialist.
According to Geneva cantonal scales, transfer duties represent about 3% of the purchase price, i.e. CHF 25'500 on a property at CHF 850'000, an amount payable in cash at the notarial deed.
| Step | Timing | Detail |
|---|---|---|
| 1. Total acquisition cost | At purchase | Price CHF 850'000 + CHF 32'000 of costs (transfer duties ~3%, notary, land registry, mortgage note) = CHF 882'000 (Notary) |
| 2. Gross yield | Annual | Rent CHF 34'800 / price CHF 850'000 = 4.1% (Investor) |
| 3. Rent actually collected | Annual | After 1 month of vacancy out of 12: CHF 31'900 (Tenant) |
| 4. Non-rechargeable charges and net yield | Annual | Condominium charges CHF 3'600 + maintenance CHF 1'700 = CHF 5'300. Operating result CHF 26'600 = 3.0%, rounded to 2.9% net after ancillary costs (Investor / PPE) |
| 5. Mortgage interest | Annual | CHF 600'000 at 2.2% = CHF 13'200. Income before tax: about CHF 13'400 (excluding amortisation) (Bank) |
| 6. Taxation | Annual | Rental income taxable in Geneva; interest, maintenance and condominium charges deductible within cantonal limits. Tax not quantified, depends on marginal rate (Tax specialist / Cantonal tax administration) |
1. Total acquisition cost
TimingAt purchase
DetailPrice CHF 850'000 + CHF 32'000 of costs (transfer duties ~3%, notary, land registry, mortgage note) = CHF 882'000 (Notary)
2. Gross yield
TimingAnnual
DetailRent CHF 34'800 / price CHF 850'000 = 4.1% (Investor)
3. Rent actually collected
TimingAnnual
DetailAfter 1 month of vacancy out of 12: CHF 31'900 (Tenant)
4. Non-rechargeable charges and net yield
TimingAnnual
DetailCondominium charges CHF 3'600 + maintenance CHF 1'700 = CHF 5'300. Operating result CHF 26'600 = 3.0%, rounded to 2.9% net after ancillary costs (Investor / PPE)
5. Mortgage interest
TimingAnnual
DetailCHF 600'000 at 2.2% = CHF 13'200. Income before tax: about CHF 13'400 (excluding amortisation) (Bank)
6. Taxation
TimingAnnual
DetailRental income taxable in Geneva; interest, maintenance and condominium charges deductible within cantonal limits. Tax not quantified, depends on marginal rate (Tax specialist / Cantonal tax administration)
Key takeaway
Between the advertised rent and the income actually generated, acquisition costs, vacancy, charges and interest absorb nearly 60% of gross annual rent, and tax has not yet been deducted.
Source: Figures case on assumptions (10-year fixed rate 2.2%, vacancy 1 month/year), to be confirmed with your bank; Geneva cantonal scales for transfer duties (~3%)
Return on equity and leverage effect
The return on equity is not the same as the net yield. It compares income after interest with the cash actually committed. Same property, same rent, three levels of down payment.
First scenario, 20% equity: CHF 170'000, plus CHF 32'000 of costs, i.e. CHF 202'000 out of your pocket. Debt: CHF 680'000 at 2.2%, i.e. CHF 14'960 of interest. Income after interest comes to CHF 11'640 (26'600 less 14'960). Result: 5.8% on capital invested.
Second scenario, 35% equity: CHF 297'500, plus CHF 32'000, i.e. CHF 329'500. Debt: CHF 552'500, i.e. CHF 12'155 of interest. Income after interest: CHF 14'445. The yield works out at 4.4%.
Third scenario, 50% equity: CHF 425'000, plus CHF 32'000, i.e. CHF 457'000. Debt: CHF 425'000, i.e. CHF 9'350 of interest. Income after interest: CHF 17'250. The yield falls to 3.8%.
Leverage works: the less you put in, the higher the return on equity, as long as the cost of debt remains below the property's net yield. Here, 2.2% interest against 2.9% net yield: the gap is slim, a positive 0.7 points only. A rate of 3.2% would cancel out the leverage, or even reverse it.
According to the usual rules of Swiss banks, a minimum of 20% equity is required for an investment property, often with a higher contribution than for a primary residence. The CHF 250'000 in this case therefore covers this threshold, but the bank may require a lower loan-to-value ratio depending on the property and income.
A point of caution: the theoretical charge calculated by the bank uses a rate of about 5%, not the actual rate. A file that passes at 2.2% can be refused at the calculation rate. This affordability test is discussed with the financial institution, not in a spreadsheet.
| Criterion | 20% equity | 35% equity | 50% equity |
|---|---|---|---|
| Equity | CHF 170'000 | CHF 297'500 | CHF 425'000 |
| Capital committed (with costs) | CHF 202'000 | CHF 329'500 | CHF 457'000 |
| Debt | CHF 680'000 | CHF 552'500 | CHF 425'000 |
| Annual interest (2.2%) | CHF 14'960 | CHF 12'155 | CHF 9'350 |
| Income after interest | CHF 11'640 | CHF 14'445 | CHF 17'250 |
| Return on capital committed | 5.8% | 4.4% | 3.8% |
Equity
20% equityCHF 170'000
35% equityCHF 297'500
50% equityCHF 425'000
Capital committed (with costs)
20% equityCHF 202'000
35% equityCHF 329'500
50% equityCHF 457'000
Debt
20% equityCHF 680'000
35% equityCHF 552'500
50% equityCHF 425'000
Annual interest (2.2%)
20% equityCHF 14'960
35% equityCHF 12'155
50% equityCHF 9'350
Income after interest
20% equityCHF 11'640
35% equityCHF 14'445
50% equityCHF 17'250
Return on capital committed
20% equity5.8%
35% equity4.4%
50% equity3.8%
Key takeaway
The lower the down payment, the higher the return on equity, but the gap between the cost of debt (2.2%) and the net yield (2.9%) is only 0.7 points: a rate of 3.2% would cancel out the leverage.
Source: Figures case: 3-room condominium, 62 m², Geneva, price CHF 850'000, operating result CHF 26'600 before interest, acquisition costs CHF 32'000 — calculation assumptions, 10-year fixed mortgage rate of 2.2% to be confirmed with the bank
The variants that change the result
A single property does not make a market. Four variants show what shifts the result, on a comparable budget of CHF 850'000.
Condominium in Champel. The price per m² climbs, to about CHF 16'000/m², for a surface area of only 53 m² on the same budget. Market rent does not follow proportionally: CHF 2'700 per month, or CHF 32'400 per year. Gross yield: 3.8%. The district premium is paid at purchase, not in the rent.
Condominium in Onex. The same budget buys about 75 m², at CHF 11'300/m². Rent reaches CHF 3'150 per month, or CHF 37'800 per year. Gross yield: 4.4%. Rental demand there is solid, but capital appreciation is less pronounced than in the city.
Property subject to the LDTR. The law on the demolition, conversion and renovation of residential buildings (LDTR) governs in Geneva rents after works and limits the sale of apartments in certain buildings. A rental property under the LDTR sees its rent capped for several years and its resale as a condominium restricted. Gross yield may fall below 3.5% depending on the applicable cap. Consult the Département du territoire (ge.ch/logement) before any offer.
Valais or Vaud. In Valais, a 3-room property at CHF 850'000 hardly exists on the plain: the same budget buys a small building or two studios, with a gross yield of 4.8 to 5.5% but a higher vacancy rate. In the canton of Vaud, on the Riviera or in Lausanne, gross yields of around 3.5 to 4% are found, with different taxation and transfer duties. These ranges are indicative and should be checked against current listings and statistics.
Comparisons of rental yields between cantons, published by specialist platforms, generally show higher gross yields in outlying cantons than in large urban centres, where purchase prices weigh more heavily than rents.
Comparative table of the four scenarios
The following figures take up the assumptions of the case (one month of vacancy, non-rechargeable charges, acquisition costs included). They illustrate an order of magnitude, not an offer.
Scenario A, ordinary condominium in Geneva: price CHF 850'000, annual rent CHF 34'800, charges and vacancy CHF 8'900, gross yield 4.1%, net yield 2.9%, return on equity 4.4% (35% down payment).
Scenario B, condominium in Champel: price CHF 850'000, annual rent CHF 32'400, charges and vacancy CHF 8'700, gross yield 3.8%, net yield 2.6%, return on equity about 3.6% (35% down payment).
Scenario C, condominium in Onex: price CHF 850'000, annual rent CHF 37'800, charges and vacancy CHF 9'200, gross yield 4.4%, net yield 3.2%, return on equity about 5.2% (35% down payment).
Scenario D, property subject to the LDTR: price CHF 850'000, annual rent capped at about CHF 29'500, charges and vacancy CHF 8'400, gross yield 3.5%, net yield 2.3%, return on equity about 2.8% (35% down payment).
To be read with caution: between Onex and the LDTR, 0.9 points of net yield represent about CHF 7'900 per year on this budget. Over ten years, with no rent growth, the gap exceeds CHF 79'000.
What to take away
Four lessons carry over to another property.
First, the gross yield flatters. Between 4.1% gross and 2.9% net, 1.2 points disappear into acquisition costs, vacancy and charges. Always calculate on the total cost, transfer duties included.
Second, leverage depends on the gap between net yield and mortgage rate. At a gap of 0.7 points, it remains fragile: a 1-point rise in the rate wipes out the gain on equity.
Third, the district and the legal status weigh more than the price. Champel, Onex and a property under the LDTR produce net results ranging from 2.3% to 3.2% for an identical budget.
Fourth, this calculation does not say everything. It quantifies neither personal tax, nor the change in the property's price, nor debt amortisation, nor the risk of unpaid rent. Is buying better than investing CHF 250'000 differently? The spreadsheet does not answer: it would require an alternative rate of return and a holding horizon.
Before any decision, have the price, the condominium charges and the building's regulations checked with the notary, the financing and the calculation rate with your bank, and the taxation with a tax specialist. To go further, see our analysis of rental yield in Geneva in 2026 and our method for valuing an income-producing building in three methods.
“This article is provided for information purposes only and does not constitute legal, tax or financial advice, nor an investment recommendation; property yields vary according to the market and each person's circumstances, which is why we invite you to consult a qualified professional before making any decision.”
FAQ
On a 3-room condominium bought at around CHF 850'000, the net yield in this case stands at 2.9%, after vacancy, charges and acquisition costs. It varies from 2.3% to 3.2% depending on the district and LDTR status.
Allow for transfer duties, about 3% of the purchase price in Geneva, notary and land registry fees, and possibly mortgage note fees. On CHF 850'000, allow about CHF 32'000 in cash, excluding bank-financed equity.
Swiss banks generally require a minimum of 20% equity on an investment property, often more than for a primary residence. Transfer duties and acquisition costs are added to this contribution and must be paid in cash.
No. Leverage only works if the property's net yield exceeds the mortgage rate. In this case, 2.9% net yield against 2.2% interest leaves a thin margin: a 1-point rise in the rate is enough to eliminate it.
The LDTR can cap rents after works and restrict the sale of apartments in certain buildings. A rental property concerned sees its rent limited, which reduces the gross yield. Check the property's status with the canton before any offer.
Louis-Marie Tortiello
contact@relocation-genevoise.ch
Location
Flat rent deposit in Geneva: amount and recovery in 2026
In Geneva, the rent deposit is capped at 3 months' rent (art. 257e CO). The amount, the form to choose and recovery on moving out: the legal framework…
Louis-Marie Tortiello
Services immobiliers
The Geneva Real Estate Market in 2026: Prices, Tensions and Figures
Price per m², vacancy rate, LDTR: the Geneva real estate market in 2026 decoded with supporting figures. What the data really shows.
Louis-Marie Tortiello
Services immobiliers
Renting in Geneva: what the 2026 figures really tell us about the
Rents, vacancy rates, LDTR and PPE yield: concrete data on the Geneva rental market in 2026. Everything you need to know before renting or investing.
Louis-Marie Tortiello