Quick answer: An apartment building is one of the most solid property investments. What matters are the rental income relative to the purchase price, the structural condition, and the location. In Eastern Switzerland, you can still find attractive properties with gross returns of 4 to 6%.
Why an apartment building?
You have some capital set aside and are considering how to invest it wisely. The savings account earns barely any interest. The stock market makes you nervous. Then your attention turns to real estate. And if you want to do it right, you quickly arrive at the apartment building.
The reason is simple: with multiple rental units, you spread the risk. If one apartment sits vacant, the others keep paying. With a single condominium, you have zero income during a vacancy. That makes the apartment building the more stable investment.
Why now -- and why Eastern Switzerland?
At the SGKB Real Estate Forum in January 2026, the message was clear: interest rates are staying low. SGKB Chief Investment Officer Thomas Stucki expects the SNB to hold the key rate at 0.0% until late 2027 or early 2028. This means: low financing costs for investors -- for quite some time yet.
At the same time, Christine Eugster from Wüest Partner showed that Eastern Switzerland is a balanced market. Supply and demand are "roughly in equilibrium." Transaction prices for condominiums are expected to rise by 2.5% in 2026. That is moderate -- and precisely what makes the region attractive for investors who do not want to overpay.
According to Eugster, investors fleeing bonds that barely yield any return are increasingly putting their money into investment properties -- specifically apartment buildings. The trend is clear.
How do I evaluate an apartment building?
Check the rental income
The most important figure is the actual rental income. Not the theoretical one. Check:
- What are the current rents?
- Are the rents at market level or below?
- How long do the current leases run?
- Are there tenants who have been paying reliably for years?
Low rents are not necessarily bad. They represent upside potential. But only if the location and condition support it.
Assess the structural condition
This is where most mistakes are made. A freshly painted staircase says little about the condition of the pipes. Look more closely:
- Roof and facade -- When was the last renovation? A roof renovation easily costs CHF 80'000 to 150'000.
- Heating -- Oil or gas? How old is the system? Replacement with a heat pump costs CHF 40'000 to 80'000.
- Pipes -- Water and sewage pipes last 40 to 50 years. After that, it gets expensive.
- Windows -- Single-glazed or triple-glazed? Old windows mean high utility costs and unhappy tenants.
Calculate the investment needs for the next 10 years and deduct them from the purchase price. This gives you the realistic value.
Evaluate the location
In Eastern Switzerland, there are significant differences. Ask yourself:
- What is the vacancy rate in the municipality?
- Is the population growing or shrinking?
- How good are the public transport connections?
- Are there employers, schools, and shops nearby?
Municipalities such as Wittenbach, Gossau, or Bischofszell offer good infrastructure at moderate prices. In more remote areas, prices are lower, but the vacancy risk is higher.
Good to know: the vacancy rate in the city of St. Gallen stands at 2.3% -- comparatively high among the ten largest Swiss cities (source: St. Galler Tagblatt / SGKB Real Estate Forum, January 2026). This means: in the city itself, demand is somewhat less tight. In surrounding municipalities, the situation is often different.
How do I finance an apartment building?
The rules are similar to buying a home, but with differences:
- Equity: At least 25% for investment properties. Some banks require 30%.
- Affordability: The bank factors in the rental income. This improves your position.
- Mortgage: Fixed-rate mortgages provide planning security. At current rates of 1.4 to 1.9% for 10 years, this is attractive.
Important: always calculate with an imputed interest rate of 5%. If the numbers still work, you are on the safe side.
What are typical mistakes?
- Only looking at the gross return -- The net return after management, maintenance, and reserves is what matters. More on this in our guide to calculating returns.
- Underestimating the management effort -- Tenant inquiries, repairs, utility billing. This takes time or costs money for a management company.
- Not setting aside reserves -- Budget 1 to 1.5% of the building insurance value per year for maintenance.
- Ignoring renovation needs -- A low purchase price is useless if CHF 200'000 needs to go into the roof in 3 years.
Practical example from Eastern Switzerland
An apartment building with 4 units in the Wil region. Purchase price CHF 1'200'000. Annual rental income CHF 62'400.
- Gross return: 5.2%
- Less management (5%), maintenance (1%), reserves (0.5%): net rental income CHF 51'500
- Net return on equity (25%): around 6.8% after mortgage interest
That is a solid result. On top of that comes long-term value appreciation: condominium prices in the region increased by 3.8% in 2025, single-family homes by 3.7% (source: SGKB Real Estate Market Report, June 2025). And with migration pressure from Zurich, prices are likely to continue rising.
Expert tip from Stefan: Never buy an apartment building without first reviewing all leases and utility statements from the last 3 years. The truths that are not in the listing brochure are hidden there.
Conclusion
An apartment building in Eastern Switzerland is one of the best ways to invest capital stably and profitably. But only if you calculate carefully and honestly assess the condition. At Rüttimann Vision, we help you find the right property and evaluate the numbers correctly.