Optimizing rental yield -- how landlords can get more from their property

The problem

You bought a property as an investment. The rental income flows in. But if you calculate honestly, less remains after interest, management, and maintenance than expected. That is frustrating, but normal. The good news: with the right adjustments, you can significantly improve the return.

The situation in Eastern Switzerland in 2026

According to Wüest Partner, advertised rents in Eastern Switzerland are rising by around 0.5% in 2026 (source: SGKB Real Estate Forum, January 2026). That sounds modest. But it shows: the market is moving. If you have not adjusted your rents in years, you are leaving money on the table.

At the same time, interest rates remain at rock bottom. SGKB Chief Investment Officer Thomas Stucki does not expect an increase in the SNB key rate before late 2027. This means: your financing costs stay low. All the more important to optimize on the income side.

1. Bring rents to market level

Many landlords in Eastern Switzerland charge rents that are 10 to 20% below market level. Often out of convenience or because they do not want to upset long-term tenants.

Check the current market conditions:

• Compare with similar apartments on Homegate or Immoscout24.
• Consider location, condition, and amenities.
• Pay attention to the reference interest rate. An adjustment is possible when the reference rate is higher.

According to the SGKB Real Estate Market Report (June 2025), advertised rents in the cantons of St. Gallen and Appenzell Ausserrhoden rose by 2.9% over the year -- faster than the Swiss average. At the same time, the selection of rental apartments in the canton of St. Gallen has more than halved over the past five years. This means: demand exceeds supply. And that gives you room as a landlord.

A rent increase of CHF 100 per month on one apartment means CHF 1'200 more per year. With four apartments, that is CHF 4'800. That can make the difference between a mediocre and a good return.

But be careful

A rent increase must be carried out in a legally correct manner. Use the official form and observe the deadlines. More on tenancy law in our guide to tenant rights and landlord obligations.

2. Carry out value-enhancing renovations

Investments that increase the living value justify higher rents. And they are often tax-deductible. Three measures with the best cost-benefit ratio:

• New kitchen -- Costs CHF 12'000 to 20'000, but enables a rent increase of CHF 100 to 200 per month.
• New bathroom -- Similar effect. Tenants pay particular attention to kitchen and bathroom.
• Floor coverings -- Oak parquet instead of carpet looks more upscale and is easier to maintain.

Calculate the amortization: if a CHF 15'000 kitchen generates CHF 150 more rent per month, the investment is paid back in 8 years. After that, it is pure profit.

3. Reduce additional costs

High additional costs make your apartment unattractive. Tenants today look at total costs, not just the net rent.

• Optimize heating -- A modern heat pump saves 30 to 50% on heating costs. And subsidies are available. Read our article on energy-efficient renovations.
• LED lighting -- In the staircase and common areas. Small but effective.
• Water consumption -- Water-saving fixtures noticeably reduce additional costs.

4. Avoid vacancies

Every month of vacancy costs you the full monthly rent plus additional costs. For an apartment with CHF 1'400 rent, that quickly adds up to CHF 1'600 per month.

How big is the risk? In Eastern Switzerland, the vacancy rate is around 1.0% (Swiss average), while the city of St. Gallen is significantly above that at 2.3% (source: FSO / SGKB Real Estate Forum, January 2026). Robert Weinert from Wüest Partner explains: "In Eastern Switzerland, there is more choice." Often, older, unrenovated apartments sit vacant -- because owners hesitate to invest in renovation at low rents. This is exactly where your opportunity lies: those who renovate and offer at market rates find tenants quickly.

Here is how to reduce vacancy risk:

• React immediately to terminations. Start marketing on the day of the notice.
• Invest in professional photos and a good description.
• Offer viewing appointments in the evenings and on weekends as well.
• Set the rental price realistically. Better CHF 50 less than 2 months of vacancy.

5. Scrutinize management costs

Many management companies charge 5 to 7% of rental income. On a property with CHF 60'000 annual rent, that is CHF 3'000 to 4'200.

Ask yourself:

• What does the management company actually deliver?
• Can you handle parts yourself?
• Is it worth comparing with other providers?

For smaller properties with few units, self-management can make sense. For larger buildings, good management saves money in the long run because it negotiates professionally and identifies problems early.

6. Optimize the mortgage

Mortgage costs are the largest expense item. Check regularly:

• Is the current interest rate still competitive?
• Is refinancing worthwhile?
• Does a fixed-rate or SARON mortgage make more sense?

On a property with a CHF 800'000 mortgage, a 0.3% lower rate saves CHF 2'400 per year. That is free return.

7. Use tax optimization

As a landlord, you can deduct numerous costs:

• Mortgage interest
• Maintenance and management costs
• Insurance premiums
• Depreciation for commercial properties

Make full use of the possibilities. A good fiduciary pays for itself quickly here. Read our tax guide for property owners.

Conclusion

Optimizing rental yield is not a one-time project. It is an ongoing process. Those who check regularly, invest strategically, and keep costs under control get significantly more from their property. At Rüttimann Vision, we support you -- from calculating returns to finding tenants.