Malta is a stunning island in the heart of the Mediterranean that boasts a great climate both in terms of weather conditions as well as financially. Over the past decade, this EU state has undergone a major transformation, and after surviving the economic crisis with minimal damage, it’s been thriving ever since.
The property market in Malta has been on the rise for some time now, largely to accommodate the huge influx of foreigners relocating to the island to settle and work. While this saw rent and purchase prices shoot up, Malta still proves to be more affordable than many of its European neighbours.
Investing in property is no small step to take. However, it’s a move that will inevitably pay off in the long-term thanks to dividends and profits that one would be able to earn off it. If you’re new to property investment, take note of some important guidelines on where to start.
According to a survey by Real Estate Insights, almost 18% of Maltese people own more than one property in Malta or Gozo. The locals have definitely seen the advantages of investing in a second property in order to earn themselves some extra cash.
Property investment marks a huge step in your life, especially if it’s your first purchase and/or in a foreign country. You may feel like you’re taking a plunge into unchartered waters, but it doesn’t have to be this way.
The first thing you should do is to familiarise yourself with the local market trends. Check out the different properties available through online channels as well as real estate websites. In this way, you can get a better idea of what the going rate is for different types of properties around Malta.
‘Brick and Mortar’ Investment
The term ‘brick and mortar’ has come to refer to any kind of commercial property, including everything from small retail outlets to large warehouses, and office buildings too.
Brick and mortar investments have become one of the most lucrative ways to earn dividends. It could be argued that the rise of technology and online businesses may have lowered the value of these establishments. However, it has been proven by several separate studies, that physical buildings still enjoy a central status in many people’s lives and will continue to outshine their virtual counterparts for the foreseeable future.
Hence, those looking to invest in commercial real estate have no reason to be discouraged. Commercial establishments are valued differently from residential ones, due to prices being increased by the actual square metres of the space, as well as their location.
Certain real estate property agencies offer specific listings of so-called ‘buy-to-let’ properties. This type of real estate is ideal for those looking for a second ‘home away from home’ which they will only use minimally.
Buy-to-let properties have an outstanding return on investment of between 4-7% and could also be perfect if you plan to buy another property in the near future.
Compromising is part and parcel of the buying process, especially with a first property. This is until you find your footing and figure out what you’re looking for out of your property investment.
Naturally, we don’t need to tell you to check how much cash you have to know whether or not you can afford a property investment. However, considering your budget also means contacting your bank about possible loans. A loan will depend on several factors including your income, age, place of employment and more. It will also enable you to gauge how much money you’d be willing to fork out to pay for your property over the years. Getting a loan will allow you to invest more money in renovating your property to a higher finish. This will undoubtedly be attractive if you come to sell it further down the line.
If your budget is limited at this point in time, start viewing properties that fit within it, rather than what you can’t afford. It would always be a smart idea to contact a reputable property agency to help the process along and help you become more knowledgeable about the local property market.
You could start by renting out the property, from time to time, to earn some cashback on your investment. This will enable you to start repaying your bank loan.
Finally, keep in mind that all great investments start out as humble and affordable projects which can be built upon over the years. If you ever come to sell your property, the profit you will gain will allow you to invest in a bigger project all over again.
Commercial Property Investment in Malta
If you would be able to purchase commercial premises or office building, complete with tenants and leases already up and running, this could save you a lot of time and hassle. This is especially ideal for a new investor who would not have to go spend any time hunting for tenants. Investing in commercial real estate would also probably require minimal initial expenses since the tenants take care of most renovation themselves. There are of course permit fees and taxes to take into consideration, but once clarified, your return on investment from the commercial real estate could be well worthwhile.
Malta offers a vast array of commercial properties for sale, for those looking to invest in corporate real estate. This can turn out to be more lucrative than domestic property, especially in the right locality. When considering the influx of foreign business to the island, commercial spaces are always in high demand. Whether retail outlets, catering establishments or office space, Malta provides all in abundance. This is especially true of certain hot-spot localities such as Valletta, Sliema, Gzira, St.Julian’s and a handful of other towns along the North-Eastern harbour.
You would need to enquire which kind of commercial entity would be best suited for your investment intentions when considering additional expenses such as licenses and tax.
The majority of those people who go on to become professional property investors usually start out in this fashion. Just remember to start small with investments you can handle and you’ll soon find yourself climbing the property investment ladder slowly but surely. This is a great way to pave the way for yourself to become financially independent.
Malta Property Investment – the Bottom Line
Some last words of advice would be to enhance the quality of your investment by buying sound materials and labour and showing respect to your tenants as well as eventual buyers. A high-end product will always pay for itself and then some when looking at the bigger picture.
Finally, it’s essential to take all angles into consideration before taking the plunge into the world of property investment. Get in touch with a specialised property agency in Malta for experienced guidance that will make the investment process a more straightforward one.