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Rental property investment is a well established practice in Malta. As a matter of fact, it was especially prevalent in the 19th and 20th centuries. At that time, Maltese residents bought up properties like hot cakes. They then rented out these properties to fellow Maltese residents as well as to some of the British enforcers who were in the country at that time.
Recently, the Maltese rental property market is seeing a significant boom. This is in large part thanks to low interest on borrowing rates. Plus, rental returns in Malta are now at an impressive 6% per annum. Meanwhile, there is also a seemingly endless supply of property investment options as well as stable capital appreciation.
Further, certain sectors, such as banking and finance, iGaming, and cryptocurrencies have been relocating to Malta for the past 10 years. This is due to its strategic location as well as its local talent. As a result, thousands of foreigners have made the move to Malta.
Read on to find out what you need to know in order to successfully invest in Maltese property.
Identify the Opportunities in Malta
Before you decide to invest in a property, it’s important to identify your goals for your property investment portfolio.
For example, are you planning on flipping properties? That is, will you buy, then restore and resell? Or are you looking to put down some roots and become a landlord?
Are you looking for a commercial property investment? Or is your focus on residential assets? Or perhaps you’re interested in buying land and developing it into valuable property?
Is this your first time purchasing property for investment purposes? If so, then it might be a good idea to get your feet wet with residential properties to rent out first, and then take it from there.
Find an Experienced Partner
Look for a real estate agent who is more than just familiar with the property market in Malta. In other words, find someone with experience in the field. You’ll want a partner who understands Maltese property investment to a tee. That’s because you need someone who can advise you with regard to both rental and commercial investment opportunities.
Get Your (Financial) Ducks in a Row
Property investing comes with ups and downs. To put it bluntly, your investment will benefit or suffer according to changes in the market.
Additionally, several factors will contribute to the type of lending rate you get. Your age, the type of work you do, your family responsibilities, and so on will all factor in.
RELATED ARTICLE: HOW TO GET AFFORDABLE FINANCING FOR RENTAL PROPERTIES
Setting up the financing is often easier when you have a financial planner to help you figure it all out. You might also want to consult with a potential lender. You’ll want to make sure that you’ll be able to handle the ebb and flow of the market with the assets you currently have. For example, you’ll be required to pay the mortgage on your property even if there are no tenants paying you rent money.
Location, Location, Location!
Ideally, you want to purchase rental property in areas that will produce a high rental yield. Tas-Sellum in Mellieha, Portomaso and Pendergardens in St Julian’s, as well as Tigne Point and Fort Cambridge in Sliema are all great examples of properties that yield high returns.
However, you can expect to cough up quite a bit in initial capital if you want to invest in such properties. Therefore, do your due diligence. Make sure that the property is truly worth your investment and aligned with your goals.
When purchasing investment property, it’s important to consider amenities that attract the modern buyer. Access to services, office regions, public transport facilities, and shopping centers are important to economically active tenants. Multiple bedrooms and bathrooms are great selling points as well.
Basically, investing in a property with the right amenities is a great way to attract the right tenants. What’s more, the right amenities will make it easier for you to sell the property later on.
Modern Finishes Are a Must
Make sure that your property is fitted out with timeless, high-quality furnishings. This will help you to attract the right tenants. However, you don’t have to spend much to furnish your home well these days, thanks to the availability of furnishing packages.
Also, look after the property by making sure that repairs are completed in a professional and timely manner. Ideally, you should hire an in-house, all-round handyman to take care of general maintenance. Keeping your tenants happy is one of the best ways to secure a higher return on your investment.
A Bonus Tip
Ask your property agent for a buy-to-let property list. This will specify property for sale in Malta that has a return of 4% to 7%. The best part about these lists is that they contain properties to suit all budgets and preferences. This makes them the perfect starting point when you’re still learning and exploring the property market.