Until now, our financial investments have been in “autopilot mode” with the aim of achieving a 6-8% return over the long term. This is in support of our objective to achieve financial independence by the time we turn 40.
Basically it gives something like that:
- First prerequisite: to have defined our investment strategy to achieve 6-8% return over the long term
- Second prerequisite: having created an account with the best online broker with the lowest fees
- Earn as much salary as possible
- Save as much as you can possible
- Invest in our favorite ETFs every month
- Looking at our money which increases by magic every month
Need for an additional CHF 75'000 per year…
The problem I have been facing for the past few months is that if we want to retire in Switzerland (currently very likely option), we have a shortfall of CHF 75'000 per year (confirmed by an independent financial advisor with whom we had fun on Excel).
At first, I thought it would settled by itself in the long term between my increases, bonuses, and other compound interest. Except that math doesn’t lie. And deluding oneself is not an option for me.
Nevertheless, I didn’t give up. Even if an amount of CHF 75'000 more per year may seem insurmountable, it is only additional Swiss francs to be earned. All you have to do is find the strategy and implement it. You remember my motto: “Life is just a game, and it’s up to you to define its rules.”
Three solutions
All last year, I tested different solutions:
- Do nothing and keep your fingers crossed: not very promising…
- Changing the game via my professional career: I have learned a lot but the status quo has huge advantages (and not only financial)
- Rental real estate: not very passive, rather complex to apprehend, but why not
Our choice
I started researching rental real estate last December.
In parallel, I also contacted a reader who started investing in rental properties several years ago: Mr. G.
We first met in a restaurant on the shores of Lake Geneva just before Christmas. It allowed me to understand the ins and outs in much less time than all my readings would have done (thanks again to you!!!). We talked about real estate investments on the Swiss side but also on the French side.
I caught the virus after seeing 15-20% net after-tax return, taking into account amortization (i.e. the repayment of the loan through rents, which upon resale of the property, will be repaid money that will come directly into our pocket :D).
So we actively started looking for a property on both sides of the border, because that’s what will allow us to stay in the course to retire at age 40.
We signed this morning!
Things followed quite quickly from the beginning of January: setting up alerts on real estate search engines, visiting several investment properties (on the French side), selecting one in particular, meetings with the bank, purchase proposal, which got accepted…
And boom!
We signed for our first multi-family rental building this morning! The internal rate of return if we sell in 10 years will be 15%!
I’ll prepare a detailed series of the entire process for you. As with the purchase of our home in Switzerland, it is enough to deconstruct each step, and in the end it is quite simple.
And you dear reader, have you already started your adventure in rental real estate? If so, what type of property, in what country, and with what return?
