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For first-time buyers in Malta and Gozo, the buy-to-let market offers an opportunity to step into property investment. With a steady demand for rental properties from locals, expatriates and tourists, wise investors can secure a long-term investment that yields a steady income and also shows good capital appreciation over the years. Diving into this sector can seem daunting without a clear understanding of what to look for, how to spot a lucrative deal and what benefits one can expect in the long term. In this article, we explore the types of properties that are ideal to acquire for buy-to-let purposes, the key considerations for finding the best deals and the must-have interior features that appeal to prospective tenants in the broader rental market. We also look at some of the incentives that are available.
What type of properties should first-time buyers look for?
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Studio and one-bedroom apartments
Smaller apartments rented out to the tourism sector are a staple in Malta’s rental market, particularly in urban areas such as Sliema, St. Julian’s and Gżira. These locations are bustling with holidaymakers, professionals, students and digital nomads seeking convenient, well-connected homes. For first-time buyers, investing in a studio or one-bedroom flat minimises upfront costs and often ensures a quicker rental turnover. Their smaller size makes them easy to manage and they’re consistently in demand.
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Two-bedroom flats
One may ask: “Why specifically two bedrooms?” A two-bedroom apartment broadens your target market to include couples, small families and shared renters. Areas such as Santa Venera, Mosta, Birkirkara and Msida are ideal for these properties due to their proximity to schools, businesses and transport links. Gozo’s Victoria is also a sought-after spot, attracting tenants who value tranquillity combined with convenience.
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Traditional townhouses
Malta’s iconic townhouses, with their limestone facades and traditional Maltese balconies are increasingly popular among expatriates and long-term renters looking for character and charm. First-time buyers could focus on towns such as Cospicua, Paola, Vittoriosa, Hamrun, Birkirkara, Balzan or Zebbug, where such properties are still reasonably priced. Again, Victoria on Gozo is also a prime spot. These homes often come with opportunities for modernisation, which can significantly enhance rental yields.
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Modern flats in lifestyle developments
For those first-time buyers that have saved a considerable sum, lifestyle developments such as Tigne Point or Portomaso cater to high-income tenants who prioritise luxury and amenities. These developments often include pools, gyms and marina views, making them perfect for professionals or expatriates. While the initial cost may be higher, the rental income and capital appreciation can be significant and these developments have proven to be a very good hedge against inflation. Surprisingly, reasonably priced modern apartments in high-end developments can be found in places like the Shoreline Development at Smart City in Kalkara.
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Holiday let properties
Investing in apartments for short-term rentals is another profitable avenue. With a steady influx of tourists year-round, particularly during the summer, these properties generate high yields when managed effectively. If you have a modest budget, the best areas to consider are the Three Cities, Xlendi, Marsalforn, Floriana, Valletta, Sannat and Marsalforn.
Secrets to finding the best deal
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Understand the local market
Begin by studying the rental market dynamics in Malta and Gozo. Research which areas are most in demand, the typical rental yields and the price range for properties in those locations. For instance, properties near business hubs like Sliema or tourism hotspots like Marsalforn will have higher demand. Your best bet will be to speak to a reputable estate agent that knows your area of interest well. They will know first of any new developments, where the best buys are and even have access to brand new properties that have not been marketed yet.
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Prioritise location
In real estate, location is everything. For buy-to-let properties, proximity to amenities such as schools, supermarkets, beaches and public transport is crucial. In Malta, areas like Gzira, Hamrun, Birkirkara and Santa Venera offer more affordable entry points while still being well-connected. On Gozo, properties in Qala, Xlendi, Marsalforn, Nadur or Xaghra, with their scenic views and proximity to beaches and restaurants, are increasingly attractive.
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Make sure to spot undervalued properties
Properties requiring light renovation can be excellent investments. A small upgrade in flooring, kitchen fixtures or bathrooms can significantly enhance the property’s appeal and rental potential. Look for listings that have lingered on the market as the sellers might be open to negotiation. Also try and develop an eye for properties with potential that does not need any major work done.
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Work with experienced, qualified agents
A trustworthy estate agent with a deep understanding of the local market can save you time and guide you towards properties that align with your investment goals. Their in-depth knowledge of what is trending in a particular area will also help you identify opportunities for future appreciation.
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Evaluate return on investment (ROI)
Calculate the potential rental income against the purchase price, taxes and maintenance costs. Aim for a gross rental yield of 4-6% or higher. Also, consider long-term capital appreciation, particularly in growing areas. The buy-to-let market offers two distinct financial advantages: consistent rental income and long-term capital appreciation.
Look at what rental income you can make
Thanks to a steady demand for rental properties, landlords can expect reliable income streams. One-bedroom apartments in prime locations like Sliema can fetch upwards of €900 per month, while larger townhouses or villas can generate significantly more, particularly during peak tourist seasons. Always speak to a rental agent about the property that you are interested in buying: calculate what rental you will be able to charge and what the demand is like for the area.
Always investigate a property’s capital appreciation over time
Malta’s property market has historically shown steady growth. According to recent trends, property values increase by 3-5% annually, depending on the location and type of property. Lifestyle developments and properties near upcoming infrastructure projects are likely to see even greater appreciation over time. This is the type of property that first-time buyers looking at letting should go for.
Attributes to look for in rental properties that attract tenants
Creating a property that renters will find irresistible is crucial for minimising vacancy periods. Here are some interior features that are especially appealing:
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Fully furnished properties
Tenants, especially expatriates and students, prefer fully furnished homes. High-quality furniture, neutral decor and practical layouts make properties more attractive. Consider furnishing your property with durable, stylish pieces to add value.
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Modern kitchens and bathrooms
Kitchens and bathrooms are deal-breakers for many renters. Invest in modern appliances, sleek cabinetry and well-lit spaces. Energy-efficient features, such as induction stoves or water-saving fixtures, are highly appreciated.
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Air-conditioning and insulation
Malta’s hot summers mean air conditioning is a must-have for tenants. Additionally, proper insulation and double-glazed windows can reduce energy costs and make the property more appealing year-round.
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Outdoor space
Balconies, terraces, or small gardens are highly sought after. Even a compact outdoor area can be a significant advantage for renters who value open-air spaces.
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Smart technology
Smart home features such as keyless entry, automated lighting, or energy-efficient thermostats are increasingly popular. These additions can set your property apart in a competitive market.
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Storage solutions
Built-in wardrobes and clever storage options enhance functionality, particularly in smaller apartments. Tenants will appreciate a home that feels uncluttered yet accommodates their belongings comfortably.
Help is at hand: Government incentives for first-time buyers
Malta offers a range of government incentives aimed at easing the financial burden for first-time buyers entering the property market. Chief among these is the First-Time Buyers Scheme, which exempts buyers from paying stamp duty on the first €200,000 of a property’s value. This translates to significant savings, making homeownership more accessible.
For properties exceeding €200,000, stamp duty is charged at a reduced rate of 5% on the remaining balance, ensuring continued affordability. This scheme is particularly advantageous in Malta’s competitive housing market, where prices can be daunting for newcomers.
Additionally, first-time buyers may benefit from low-interest rates on home loans, with many banks offering favourable terms in line with government initiatives. There are also grants for those purchasing properties in need of restoration, particularly within urban conservation areas. These grants aim to preserve Malta’s architectural heritage while incentivising buyers to invest in traditionally built homes.
Collectively, these incentives underscore Malta’s commitment to fostering homeownership and supporting residents in establishing roots within the local community. First-time buyers would do well to explore these benefits thoroughly to maximise their investment potential.
Go for it!
For first-time buyers, buy-to-let properties present a good investment opportunity. By targeting the right property type, prioritising prime locations and ensuring the property has appealing features, you can maximise your returns and enjoy steady income streams. With careful planning and an eye for detail, your first step into property investment could be the beginning of a rewarding journey. Frank Salt Real Estate is Malta’s biggest real estate group and offers fantastic discounts and incentives in collaboration with many suppliers to first-time buyers. With us, you stand to save more than €20,000 making use of our Vouchers and Discounts Package! Also make sure you read our First-Time Buyer’s Guide here , an invaluable source of information for those who are determined to get onto the property ladder.
