Potential analysis
Are you the owner of a property and looking to unlock its full potential? Our property experts will assess what attractive opportunities a new build or renovation might offer.
Don’t miss out on your property’s potential – Increase its value!
Old properties, new opportunities: Many Swiss single-family and multi-family homes have solid structures, making them ideal for continued use. Often, these older houses come with generous outdoor spaces that enhance their living quality.
While preserving existing structures is valuable, property owners should consider whether they are foregoing financial benefits in the long run. In recent years, many municipalities have adjusted their building and zoning regulations, significantly increasing the utilization coefficient.
This coefficient defines the maximum permissible living space relative to the property size. A higher coefficient means more building space is allowed on a given plot. Often, this means that a property currently occupied by an older single-family home with a large garden could accommodate a small multi-family house, generating significant rental income or proceeds from apartment sales.
Another way to create additional living space is to extend the existing structure by adding extra floors or an annex, avoiding the need for demolition.
Determining value potential
For many owners of older properties, it makes sense to obtain a non-binding evaluation of their plot’s potential before considering a sale. Many older buildings are currently underutilized.
Factors
The question of how much living space could be developed on a given plot is answered through a potential analysis. However, it’s not just about quantity—more living space, more volume, more floors—but also about quality, such as flexible floor plans or maximizing views and sunlight throughout different seasons.
Opportunities
A key point: The existing property does not necessarily have to be replaced with a new building. In many cases, an additional floor can be added, or a modern extension can be built, significantly increasing the property’s value.
Added value
Regardless of how the best use of a plot is determined, adjusting the living space to align with current building and zoning regulations — whether through new construction or expansion — often results in significant added value. This benefits not only the property owner but also future residents.
Example of a potential analysis
250 m²
Current living space
Example: The current living space, i.e. the net living area on the plot, is 250 m².
600 m²
Utilization ratio
The utilisation ratio allows a net living area of up to 600 m².
If this potential were utilised in the form of 5 condominium units of 120 m² each, the theoretical return from the sale of these units, assuming a price of CHF 14’000 per m² of net living space, could be as follows:
Sale of 5 condominium units at CHF 1.68 Mio. each
+ 10 parking spaces at CHF 40’000 each
= Total sale price CHF 8.8 Mio.
From this sale price, the costs for planning, construction and marketing of the new apartment building must be deducted. However, this development is typically not carried out by the landowner, but by a project developer who performs the above calculation and subsequently realises the project.
For the landowner, the key question is: What is more valuable?
The existing property with the plot, or the plot with development potential?
This is where the so-called residual land value calculation is applied, which in the above example results in a land value of 30% of the potential sales price of CHF 8.8 Mio., i.e. CHF 2.64 Mio. If this amount exceeds the market value of the existing property, it may be worthwhile to realise the development potential.
To establish this, we offer an initial, free potential analysis including a residual land value calculation. As a second step, a professional feasibility study is recommended.
