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Choosing The Right Rental Property In Malta
Renting Property in Malta – There has never been a better time to make a property “buy to let” investment in Malta – Perry Estate Agents highlight 5 essential tips to help make the right choice.
The rental market in Malta continues to boom as is evident from Perry Estate Agents leading letting department’s year on year exceptional results – it has never been a better time to invest in a buy-to-let property investment. Investing in such properties has paid off for landlords both in terms of income and capital gains but it is essential that you make a well-informed decision on where to invest your money to maximise your return.
RESEARCH THE MARKET PROPERLY BY USING A REPUTABLE ESTATE AGENCY
It is crucial that you do your research properly. Perry Estate Agents boast a very strong letting department. It has established itself as the market leader for quality and high-end property continually proving to be the estate agency of choice for many companies of international repute operating on the island. During your search for suitable property, Perry’s sales and letting professionals could be consulted to give their guidance on current market trends in the areas you are considering and to give a realistic rental value for your prospective purchase. This will give you the opportunity to truly weigh your options whether the particular investment would reach your expectations in terms of return on investment.
CHOOSE LOCATION CAREFULLY
It is crucial that you select a promising location. By promising location, we don’t mean a more expensive or cheaper location but simply a sought after town or village where people would like to live, usually in a more central or coastal location. You must identify locations which have proved to have a special appeal to tenants. Remember that the letting market is dominated by foreign clients. It is important that you match the right kind of property that you can afford and what is available on the market with the locations where prospective tenants would choose to make their home. That is where our experts at Perry Limited come in. Although this may seem obvious it is the most important aspect of a successful buy-to-let investment. For example, the overwhelming majority of apartment rentals are done in the much sought after harbour area with the coastal towns of Valletta, Gzira, Msida, Sliema, Ta’Xbiex and St.Julians. These being the most popular as they are convenient city locations with all amenities within walking distance and excellent transport links, besides the fact that most of the more modern and sought after office buildings are located here. Many buy-to-let investors make the mistake of investing in a property close to where they live as they feel they understand the area and can better look after their investment being in close proximity, however, this is not necessarily the best place to purchase such an investment and maximise returns. Consider looking further afield.
DO THE MATH
You need to crunch some numbers! It is advisable to put pen to paper and write down the cost of each potential property and likely rental yield. You should aim for a return of 5%-6% in the current buoyant market. Rental income should cover 125% of loan repayments. It is always important to have a contingency fund when the property is not being rented out since bank loans will still need to be paid and any repairs ought to be fixed fast in order to avoid upsetting your tenant and encourage him to extend the lease agreement when it comes up for renewal.
TARGET YOUR TENANT
In the process of identifying a suitable buy to let investment, it is important to remember that you are not the tenant and must put yourself in the tenant’s shoes. If you have a smaller budget it may be a good idea to start by targeting university students as tenants, students require smaller and functional accommodation, easy transport to campus and easy access to shops and eateries as they generally do not drive. The university town of Msida is especially ideal if you are targeting this kind of tenant for the simple reason that our only university is based here and foreign students continually seek accommodation within walking distance to campus. If you have a slightly larger budget, then you may consider targeting young professionals who make up a segment of the market that has been increasing year by year due to all the large companies deliberately choosing to relocate to Malta. Such clients tend to want to be in the social capital of Malta comprised of the bustling Towns of Sliema and St.Julians as they would require something a little more up-market and stylish within easy walking distance of the seafront and some nightlife. If you are targeting families’ homes then priorities of such clients are primarily space, both indoor and outdoor and proximity to schools, parks, beach clubs, and other amenities are considered important for children. In fact, lifestyle developments with private pools and villas with gardens and private pools have proven to be the favourite choice for families.
LOOK AROUND AND NEGOTIATE THE BEST POSSIBLE PRICE
Contact one of our experienced real estate professionals at Perry Limited to make sure that you negotiate a good deal, compare areas and property types. Our experts are here to make your experience as swift and as smooth as possible. Buying the property is only the first step – our letting department will then step in to find a suitable tenant in the least time possible and to advise you on what would be required inside the property to ensure a quick rental. With over 35 years’ experience, you could leave it to us to deal with inquiries, collect payments and guide you through the whole letting process including the drafting of the lease agreement.
To view our Long Lets portfolio for Malta click here
Robert Spiteri Paris B.A, LLD is the Managing Director at Perry Estate Agents Malta
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