Costs

Whoever becomes involved with real estate leasing should spend some time dealing with the fundamental leasing costs and with the individual cost parameters:

• leasing costs
• cost parameters

leasing costs

• leasing payments
  • =   combination of interest on capital and rent
• fees and property taxes (property taxes)
  • notary and land registry fees
  • possible real estate transfer tax (if provided for in the canton of domicile)
  • real estate taxes (if provided for in the canton of domicile)
• operating costs
  • maintenance costs
  • upkeep costs
  • repair costs
  • insurance premiums 

cost parameters 

• investment costs
  • =  funds dispensed for the purchase of land and the erection of building structures (overall investment costs)
  • lacking specific information about the investment volume, one speaks of so-called “budgeted investment costs”
• leasing payments
  • =  periodically made payments to satisfy the contractual provisions for the use and right to use the leasing property
  • calculation in percentages of the final overall investment costs of the leasing agreement taking the interest and amortisation share into account
• processing fees
  • =  payment for the processing of the leasing agreement; depending on the provider, an additional fee is invoiced if the lessee allows for charges for different variations for the optimum financing of the leasing property
• option fees
  • =  fee charged to the lessee when exercising a purchase right at the end of the ordinary term, for the work of the lessor
• residual book value of the leasing property
  • =  total of the investment costs of the leasing less amortisation paid by the lessee up to a specific time of measurement
  • or: asset value of the leasing property on the lessor’s books taking the depreciation schedule permitted under the tax provisions into account
• refinancing
  • =  outside sourcing of money through the lessor, corporate-internal or in the open market > refinancing costs (interest for the loan and loan costs)
• early discharge compensation
  • =  for the premature dissolution of the leasing agreement for important reasons or as a consequence of late payments, under most leasing agreements so-called early discharge compensation is owed (as a consequence the early notice of the refinancing by the lessor) in addition to the projected residual book value as part of the damage claim settlement