From a first apartment to a seven-unit building: what we wish we had known

Everyone talks about property as a safe investment. That is partly true. But nobody describes the road, so here is ours, mistakes included.

The first apartment, and the tenant who would not leave

Almost twenty years ago we bought an apartment on the shores of Lake Geneva to let. We managed everything ourselves. We were naive and, above all, too nice.

The tenant stopped paying. He said he was leaving, then did not leave. We had two small children and a single salary at the time: every month without rent hurt. When he finally left we re-let easily, but we had been scared, and we sold.

Lesson 1: professional management is not a luxury. It puts distance between your emotions and your tenants.

Lesson 2: with a single unit, one defaulting tenant means 100% of your income disappears.

Why La Chaux-de-Fonds

Years later we wanted to start again, differently. By the lake, our budget would have bought a small building or three apartments. In La Chaux-de-Fonds, for the price of a semi-detached house in the Lake Geneva region, you can buy an entire building of seven apartments.

Seven apartments means seven tenants: if one leaves or stops paying, the building keeps running. Diversification is not only between shares and property; it also happens inside a building.

The price of a first deal

It was our first purchase through a company rather than in our own name. To the bank, the company had no track record. We knew we would pay a little above the bank’s valuation and put in more equity. We accepted it: this first building was also our proof to banks that we could deliver a project.

Lesson 3: the first purchase costs more than the ones that follow. It also buys you credibility.

Our biggest mistake: not challenging the property manager

The building came with a property manager already in place. We kept them without really questioning them. Mistake. In just under a year we saw arrears poorly chased, files that dragged on and little transparency. We changed partner.

If we did it again, we would examine the manager from day one, as rigorously as the building itself:

• How do you follow up late rent, and on which day do you send the first reminder?
• What report do you send me, and how often?
• Who checks the caretaker’s work?
• How do you choose contractors, and who approves quotes?

The good news: when you start, you meet people. Our current partner, the property agency Wolf Output SA, has become a trusted ally, and those relationships are worth as much as the walls.

The storm

In July 2023 a violent storm damaged the roof. Two upper-floor apartments became impossible to let. What followed was less a building job than an administrative marathon: assessments, counter-assessments, reminders, disputed excesses, lost rent to be recognised. Nearly two years before we could re-let.

Lesson 4: read your policies before the claim, not after. Check in particular whether loss of rent is covered. Business legal-protection insurance, recommended by our broker, proved invaluable.

Small things, big differences

• Rent is due on the 1st. A tolerated delay quickly becomes a habit. Consistency is a form of respect, on both sides.
• The caretaker needs a framework: a job description, checks and regular feedback.
• An old building is alive: mandatory electrical inspections, boiler, fire extinguishers, chimney sweeping, snow clearing. Keep a reserve.
• What nobody plans for: we had to file a police report for heating oil stolen from the tank, and repair vandalism.

So, is it worth it?

Yes. Despite all of that, the building held. The rent kept paying down the debt, the building’s value withstood the erosion of money, and we learned a trade. During a year of family travel, the company even managed the letting of our own home.

But know this going in: it is not a passive investment, at least not at first. It is a trade that needs humility to learn and strength to hold on. Dwennimmen, in short.

Next article: Choosing a property manager, then keeping them honest. To receive it, subscribe to the letter below.
We share personal experience, not investment advice.