I guess by definition, it is not worth it to overpay otherwise it would not be overpaying.
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Mods, looks like we can close the thread 
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The banks usually curb your enthusiasm if you want to pay too much for a house that according to their own data and evaluation is worth (much) less.
Unless of course, you’re willing to finance this adventure (the extra cost) with your own money.
In short, your mortgage is the safest bet on its future value.
Most people buy a property with a mortgage so one can only consider the stock market return on say 20% of the property value (i.e. deposit) when comparing with price increase of the whole property value.
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Isn’t Chamonix in France?
Exactly. Or in other words: If you have a 3.5 fold increase in property value and put in 20% equity initially, this amounts to a 12.5 fold increase in equity value.
Now of course FMF might have a leveraged stock portfolio. Not very common among for non-institutionals though.
True and in Switzerland you eventually need to pay down to around 1/3 so you get a long term max leverage of 3:1. It probably makes sense to calculate on this basis as you’ll be obliged to put in that extra capital.
It is worth remembering that leverage can also work against you: a fall in value can completely wipe out your equity, oblige you to fill in that equity and have that potentially wiped out too.
And you have somewhere to live “rent free”…
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My partner is selling her 4 Multi Family properties in Switzerland for only a little more than she paid circa 10 years ago, 2 in Zurich, one in Aargau, one in SZ. Some bargains compared to buying a flat here in my view. All were bought with large mortgages, so only a slight increase on each one is required to do OK, all selling now for 700k to 1m chf, some quite big places, most 3 apartments. Though net income varied, amortization payments helped forcing a savings plan. Looking back, bitcoin, Tesla, Apple, (no Intel, not a 386 fan) Nvidia. Would have been a lot less work. No hassle trying to sell them like we have now.
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Have you thought about selling the apartments individually?
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I’m surprised the price is not higher than 10 years ago given the general increase in housing costs during that time.
Yes, some people go into real estate expecting to be a magical money making machine. The reality is that it can be a lot of hassle and work and at the end also difficult to sell and get it back into cash.
Though if someone is willing to deal with owning and living in a multi-family building, then financially it makes more sense than buying a single family home as the price can be about the same, but the rental income stream should more than cover the mortgage so you effectively can live there rent-free.
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Some do (naively), but imho most people think of it as a safe investment more than making a lot of money. And in the meantime you get to live in your “own” house.
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The key question when buying is to ask yourself - how easy will it be to sell?
Indeed. Given the rather illiquid market in Switzerland, I assumed ‘impossible’ when making the buying decision.
But then there is the “Eigenmietwert” imputed rental value.
Shouldn’t that be taken into the calculation too?
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One never buys it. One just pays to the bank ones whole life!
Quite so. But in my experience the additional Eigenmietwert added to income and then taxed, still means costs are far less than one would pay in rent for an equivalent property…
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My brother in laws wife died some time ago. He owns a house. And the bank that he was paying to said they want to now sell his house because his income was below the minimum that they demand !!!
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What does his loan agreement say?
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I don’t use gearing for investments, the last 4 properties I bought for cash.