Should You Invest in a Rental Property?
The answer to this question is absolutely “Yes!”
If you can afford to buy a property to rent out, this will be a great start on your way to financial freedom. The property market in Malta and Gozo is teeming with options. So whether you are interested in owning a long let Gozo property or a studio flat for rent in Malta, this article can help you get started.
Below are some factors you need to consider before investing your money in a rental home:
Do your homework
The secret is to educate yourself about Malta’s property rentals market with the assistance of a good real estate agent. Property in Malta has consistently outperformed any other kind of long-term investment the world over and real estate is part of many an independently wealthy investor’s portfolio of investments. If you ask any one of them, they will always say: “I wish I did it sooner”. It is a known fact that the longer you own a property, the better an investment they become. The reason for this? Building costs always go up, so the longer you delay buying a property, the more you will pay.
Invest for financial freedom
Just remember, the amount you have bought the property for will always remain the same given you have bought it cash or if you have a bond on the property, given that you pay the interest amount each month. The rest of the money you make from the rent will be in your pocket to save and set aside towards buying your next property! A great idea is to not spend the money you save, but to pay off the bond first sooner and that way you will have less liabilities and even more cash in hand to do the same all over again when the property has been paid in full. This way you will set a precedent for the future and lay the foundation stone to absolute financial freedom.
Start as soon as you can
You can start investing your money in a rental home at any age, but the best time to buy your first one is when you are young and single, before you have added costs in the way of other commitments. You can start by having an apartment for rent in Gozo or a studio flat for rent in Malta. Having your first rental property that is profitable will in fact make things easier for the rest of your life given it has been a wise and sound investment.
Decide whether to invest in old or new properties
The plus points of older properties are that they usually have higher ceilings, thicker walls, and may even include additional space such as a scullery or pantry that can be converted into an extra room such as a small study or baby’s room. The downside of older properties is that they require more maintenance, are not well insulated, show wear and tear and may need extensive renovation and updating. New properties on the other hand will, if well-constructed, be fuss- and maintenance free for years to come, will usually be modern in design with open-plan features and be guaranteed for some years after construction. Modern builds may be a bit generic in character but will be easy to personalise with fittings and finishes of your choice.
Look for a promising area
If you see a lot of vacant properties in a neighbourhood, take this as a warning. Home buyers probably see some red flags that’s why they do not choose to buy property in this neighbourhood. Also, before deciding to buy check the amenities and what the noise levels are like. Visit the area at different times of the day to assess the overall character of the surrounding neighbourhood, as it will not be the same all the time. Speak to any neighbours you can find and ask them what the positives and negatives are of living in the area and if they would recommend it to anyone.
Work with a professional agent
Find a real estate company with a good track record and successful history first, such as Frank Salt Real Estate. Then choose an agent from the group, someone that knows the area where you want to buy in, the best. With their local knowledge of the current market conditions of the area you prefer, they will be able to guide, advise and show you the best properties in the area to invest in.