Close

Property: Buying vs Renting

I'd like to collect in one place people's sentiments, emotions, eperience and especially information on the subject.

Many people are against buying a property in Malta, but exactly for what reason? Are there people already bought or considering to buy here? What're the parameters to consider? Are there any pitfalls to be aware of?

Also regarding securing a mortgage, what is the process and what costs and fees involved? What's the minimum deposit required? Are mortgages available to expat residents?
Is it possible to remortgage or take a mortgage out later on, on a property bought for cash?

Have you heard of  Rent-to-buy schemes? Are they worth considering?

All comments and contributions are greatly appreciated. Thanks in advance.

ONLY MY OPINION...Badly built. poor insulation, damp, poor quality workmanship, no real guarantees, developers and builders are a nightmare, there are trust issues when buying, really hard to sell once you've bought if you find its not the area you thought it was...often only found once you've lived there for 6-12 months or more....

all of these things made the decision NOT to buy and simply rent a very easy decision to make.....renting is a far more attractive proposition as far as we are concerned....
We were told (and had confirmed by those who followed the buying route) that mortgage offers, deposit requirements. and associated costs are variable depending on your status and can be considerably different if a non national.

Saying that its a very personal choice, depends on your status and your own personal outlook of what you want from your NEW life. Personally we would never ever buy again.... renting is so much more affordable, flexible and it suits us and our needs, and we applied the same "sense " in Cyprus our current home as we did when we lived in Malta for 6 yrs.

Properties in Malta are over priced and very badly constructed. Add to that the problems with selling if / when you want to move then renting makes sense.

Most people move house / flat at least once after they move to Malta, owning the property makes that much more difficult.
Building work in Malta means that you wont have the same view or the same type of buildings either side of you for long.
That nice bit of land that was opposite your property that he agent told you would never be built on will have a block  of flats on it within  five years!!

Buy in Malta..... NEVER!!

Terry.

Agreed, never buy. Not unless you are prepared to take the risks outlined above or have your money locked away for years and take a loss when you sell. Not a good investment.

My girlfriend and I are in the process of buying a house :)

But probably our situation is different from that of the gentlemen above: we're still working, in our mid 30ies, have some disposable savings, she is Maltese so we have a stronger link to Malta.

We're going to be renting until 2018 (when our fixed-rate mortgage runs on our flat in Brighton) but then we were thinking of possibly buying a house of character in the old town of Victoria and renovating it. We would probably have enough equity from selling our Brighton flat to buy one without the need for a mortgage.

The main reason we would want to do this is so that we would have the freedom to decorate and arrange the property as we wanted. Also, some of these properties date back to the 17th Century I feel like they must be pretty solid (or is that a backward way of thinking?) Finally, I like the idea of having my own home.

Do you think there is a difference between Malta and Gozo in relation to this questions, and also in old v new properties?

the questions are the same and as the mentality is also the same in my opinion... the answers are likely to be the same

Sounds fantastic , especially the bit about not having a mortgage !!! - and I totally get the bit about owning your own place and having the freedom to renovate etc 😀 - the only thing I would advise is to be fully aware of any potential problems should the UK leave the EU and would it impact on your immigration status ! - the only reason I have posted on this subject is because we were in a similar situation to yourselves , also living on the south coast and with enough equity in our UK home to buy a place outright on Malta but I just wasn't sure it would be the place for us long term (it wasn't , we returned to the UK in under a year ) and I was concerned about the EU situation !!!
Anyway best of luck , the UK may well stay in Europe anyway so nothing to worry about 👍😀 - all the best !

Fail to see why no one mentions all that money paid out in rent, no possibility of any increase in real estate prices (all negative it seems).  Surely money paid out in rent when you don't own should be factored in to the eventual loss on selling?  Yes, certainly uncertainty about continual good aspect, if one exists when buying, very shonky building in many new buildings, and it takes a long time to sell....dont know about the old buildings.  Surely they are not such bad buys considering their unique character.  Everything is ultimately not just about money and gain...but quality while existing NOW.  But then maybe this is my antiquity!!

Hello,
We have bought and sold a few times in Malta.
All pretty simple, went smoothly each time, no difficulties with the process.
The only problems we had were with ARMs re the electric and water bills but I wouldn't let that put you off !!
Kind regards,
Helen. :top:

There are a lot of properties on Gozo still unsold in the two years we have been here and
probably been on the market a lot longer.

Garth Turner's rule of 90 :).
Cdn site on housing and investing, but excellent and relevant to many housing markets around the globe these days.
Www.greaterfool.ca

I just bought (no mortgage, got a good price). Loving it so far. ;)

I own. No mortgage. No regrets; No desire to sell.

Buying:  I would suggest you rent first and get the feel of the country.  Buying is easy selling might take a long time ( getting a buyer ), Go to Frank Salt or Dhalia estate website ( buying property guidance ) telling you what you need to pay. 
As for mortgage estate agent is the best person to tell you. 
ID card: It is your decision ( again depend on how long you going to stay in Malta ) I hold British Passport, and because my wife and I have decided to stay in Malta for good and now we have Maltese ID Card. If you do not intend to stay in Malta for a very long time, In my opinion you do not need to apply for ID card ( Residency ). I have Maltese ID card ( Residency ) my status is the same
Terry

Pleeeeeease, It's NOT an ID card!!!!!!!!

A Malta ID card is for Maltese citizens and contains biometric information and may be used as a travel document within the Schengen area.
A Malta EResidence card is for those other than Maltese citizens. It is a registration document and does not contain biometric information and is not a valid travel document..

Having read most of the posts, I feel I must set the record straight.  One cannot generalize re. workmanship being shoddy etc or property being over priced.  I have seen lovely properties that were very well-priced and so sold extremely fast.

I have worked in real estate for a year now with the two leading real estate companies on the island.  I would say that it depends very much on your budget and the area you are looking for property in.  I  used to work in the North promoting properties in Mellieha/Qawra/Bugibba/St Paul's Bay and in these areas in order to keep prices down, the developers often did not finish properties to my liking.  I now work in a totally different area - namely Ibragg/Swieqi/The Village/Madliena/Sliema etc  and the developers who develop in these areas, generally finish their properties to a very high standard.  Obviously prices will be a lot more.

Should one rent or buy?  If you are careful where you buy and go for a property in the areas I indicated, you should not have any problem in re-selling.  What you need to do is to make sure you really go round and see a lot of different properties in your chosen areas.  It also makes sense to buy something with a garage even if you don't need it as most clients want a garage.  It is important you do not buy a property which is overpriced.  Real estate agencies have to advertise properties at the prices the owners give them.......Often owners overprice their properties.  If you buy something overpriced and not at the market value, that is when you will have a problem to re-sell.

Obviously, if you buy a property you really should buy in an area where you can rent it out for a decent amount.  Whilst an apartment in the St Paul's area might cost around 500-600 euro a month (unless it is seafront), one in Ibrag/Swieqi etc  will bring in well over 1,000 euro - 1,200 euro a month, depending how you furnish it. 

Somebody mentioned Gozo -  I think investing in Gozo is a far greater risk than investing in Malta,  If you want to settle in Gozo, then I suggest you rent.

You will not be impressed if you see how the houses are built and more important thing is that u get stuck with whatever property you buy, they are already over priced and it is not easy to resell. So if u are buying plan to forget your money for at least 5 years

Hi,

I recently visited an appartment with a friend who was interested in renting in Pendergardens . Quite upclass with the asking rent of more than 2500 Euros and it was not well finished and in certain items even shoddy !

In fact all finished properties I have seen in the past years were unfinished and shoddy .

I was not impressed comparing that place to European standards.

Cheers
Ricky

Underneath the veneer and facade is a cheap, block built, shoddy masterpiece that could be compared to something built by a child and a set of building blocks.
Just take a look as they are being built.
Thrown together.

They are shoddy and yes it may be a generalisation  - but it is real... as others have said watch them going up and you will see immediately why they have the reputation - just about every apartment i have rented - 4 over 6 years  - were not finished well and had things that are basic finishing  - missing...!!!! They are built quickly shoddily and with cheap materials and sold expensive.... with no real guarantees once youve bought them.... jusy try getting a developer builder to rectify issues after you have bought.... nigh on impossible once theyve got your cash 

in contrast here in Cyprus the houses are built in better ways and yes I have watched them going up - they are without doubt better finished, and are of (in my opinion) better quality and have more style....(altho i accept thats a personal taste thing)  Many who bought here years ago are struggling to sell, however the rental market here is superb for the renters... cheap well furnished ad there is an abundance of good high quaity rentals - mainly because those who cant sell end up renting them out......  at very reasonable rates - ie large 2bed villa with own pool FF car port gardens nice private road all white goods etc €400-450 per month

Although the risk is very low, if not negligible, I shudder  ;)  to think what would happen if Malta were to ever experience an earthquake of any significant magnitude.

The last earthquakes to affect Malta were on the 19th and 20th November last year. The last earthquake to cause significant damage, particularly on Gozo, was in 1911. (The last major earthquake in San Francisco, 1906)

There is some eveidence to suggest that serious damage has been caused in the past. 1. Cart ruts that disappear off the edges of cliffs. 2. The collapse of the cliffs on which the original San Dimitri Chapel was built. There are also historical records of earthquake damge on Malta and Gozo, (https://vassallohistory.wordpress.com/e … s-in-malta).

I am not an expert in local building, but maybe the traditional construction method of stone blocks held together with clay and or stone dust and then a lime plaster in the joints provides a structure that can absorb earthquake shock waves. On the other hand, concrete blocks bound together with rigid cement may be less flexible.

But I sleep well at night, just as people do in San Francisco.

Well, I didn't feel a thing last year. Maybe the earth just moved for you  ;)  :)

You can see apartments being built all over the place in Gozo/Malta and it doesn't take a genius to tell that they're of very low quality.

Rent. Rent. Rent. Renting is much cheaper than buying unless you're just keeping your money in the bank. Rental yields in Malta are some of the lowest in Europe (bottom 2-3 I think) and I don't see that changing... ever.

mantasmo :

You can see apartments being built all over the place in Gozo/Malta and it doesn't take a genius to tell that they're of very low quality.

Rent. Rent. Rent. Renting is much cheaper than buying unless you're just keeping your money in the bank. Rental yields in Malta are some of the lowest in Europe (bottom 2-3 I think) and I don't see that changing... ever.

mantasmo,
Can you tell me please what to look for as sign of very low quality, when am looking at apartments being built?

In property investing, you have at least 2 sources of returns:
Capital gains over and above the inflation and rental income.
Frank Salt claims 6% rental income in Malta is typical.

Outside of property investing you have (at least in Canada- but I'm sure there are equivalents)- index funds, preferreds, REITS (real estate investment trusts), stocks... To name a few. These often outperform property investment in the long run. BUT, there is little status in saying you invest in these things, and most people's eyes simply glaze over at the mere mention of them ;). It's much easier for the sheeple (at least where I come from) to comprehend returns from property investing.

They're available in the UK too, not sure about Malta. Of course it's a global market and one can invest in those funds and products without being a resident in that country.

These are my problem:
1. I have never managed to get the returns promissed/advertised in finanfial product
2. various forms of fees and charges regardless of performance (or making a loss)
3. Lack of transparency
4. lack of control
5. entry fees (up to 6%)

To be fair there're positive point
1. hands off (armchair) investment
2. no void periods/no decorating/no damage/no chasing unpaid rents
3. liquidity is a lot greater - much easier to turn it into cash
4. Professionals outperform you (hopefully)

Please note this post isn't so much about investment but buying a property vs renting it.

Yes, but the argument buyers often use for buying being a better option is that renters 'waste their money' because the assumption is that they don't invest the money they would otherwise be saving by not being a homeowners (not renovating, having no repairs to deal with, cost of selling, property insurance- of course I believe there is none in Malta?etc)
I'm aware it's a global market, but for example In Canada you can sock investments away in a tax free vehicle which most people don't fully understand. So each country has it's own investment tools as well. There is also a huge lack of transparency in real estate, in Canada right now it's an absolute gong show, and as for control- that is always pure illusion ;).
From what I've gleaned here in Malta, rents are much more affordable in relation to buying, as another person noted.

With a mortgage interest rate of 2%, and 3 bedroom properties strting below 50,000, how can renting be cheaper?

Oh god, that low? What part of Malta?
Geezus, who needs a mortgage at that price?! Haha

3 beds at 50K? Are they completed or shells or in need of improvement for habitation?

Under 50K in fact, not brand new and not a reck but some minor work and decorating to be expected. I have seen in all places online, free leaftes I think called Sellers Direct, also estate agents own sites. I was doing market research not specifically looking for a house in an area

Under 50 k for a decent 3 bedroom property ? Dream on ............... not even in the worst areas of Valletta!

I receive these leaflets as well and check out offers but ..... I don't believe what I have not seen with my own eyes.

Ricky

ricky,

You can dream on and then look again at my post only this time look closely:

I never said it's decent decent or its condition, I never said what location, I never said it's a brand new property, but if you stop dreaming and assuming and instead looking, you can find them. I won't make money if I buy a property in top condition in top location: price only drops from there due to commisions and fees added. It would take around a year to recover those costs in gains ( price increases).

I am close to buying a 3-bed flat in Sliema for under 100k now. It has the potential to be made into 4 bedrooms with minor building work. It also has the potential to build two more flats on the top.

I bought my first property when I was 17: with my own money if I may add and I have been buying and selling properties ever since. I have never lost money on a property. You can make money from properties in any market but you have to adapt and reinvent what you do.

You have a tunnel vision and preconceived ideas about buying in Malta. I can totally understand that. Buying is not for everyone. You're not the first to tell meit cvannot be done and probably not the last. I listen to objections and arguments but make my own mind up as only I know my own capacity: strengths and weaknesses in this area.

If you need more advice, I am here to help.

I'm guessing from the amount of for sale signs that there isn't much in the way of profit over here maybe that's why people would steer well clear but I think if I was buying to live in it long term I'd consider it

Hi NewHorizonz,

you seem to have changed the goal posts !

You were talking about under 50 k but now you are talking about under 100 k but with no further details.

I have been with Maltese friends to many properties in Sliema in the past years.when they wre looking to buy but the prices were no where near under 100 k !  I would be interested in viewing the property that you quote !

In my more than 6 years of Malta I have only experienced friends and Expats having left Malta after buying property and making massive losses on their investment.s  THe previous property I rented was owned by a Remax manager which he was glad to have sold to Italians. He told me that he just came out even on his investment after 6 years ! And the Italian buyers are not that happy after they moved in -)))

UK friends left the island after buying their flat more than 10 years ago and made 30 % loss. Why ? Someone built a block in front of them and they lost their sea-view and sun !

We are giving advice to the general public , in particular those coming from the Uk ( my home is my castle attitude and used to making gains out of every property sale in an increasing property market over the last years).

Cheers
Ricky

I've done a lot of research into different property markets across Europe and Malta is not where you want to be buying. At 2-3% rental yields minus maintenance costs minus (very likely) a drop in property value due to overbuilding and ever increasing supply... ehh.

I do know that some people absolutely must own a home to feel like they belong and that's fine. Just don't pretend that it's a sound investment.

Dear richy

I didn't move the goal post: I talked of two properties:
The first was lowest 3-bed I've seen while looking at the market doing my research on market dynamics. It was in a conversation renting vs buying so I mentioned the lowest I've seen. The second is the one I am looking to buy, not the cheapest one on the market.
You see if I buy the cheapest, my outlay is lower - for sure but the ceiling for gains is also lower. I wouldn't buy the cheapest house on this principle. I would buy the worst house in the best area, then I need to just clean it properly: spending 500 euro maximum to sell at a profit and make money! because if it is clean and presentable, at least I could people coming inside and taking a look. If it is untidy, dusty, dirty windows and old tatty curtains from WWII hanging, people don't bother taking a close look. Thank god for this trait because that's how I've won a lot of times: having the vision to see what it could become through what it is now.

I listen to your advice and wisdom. but I am not new or totally inexperienced in this area. I am often the one who buys the house from the people you mention sometimes at half what they paid. I don't romanticise it. I don't buy it because I love it, I buy it if there is money to be made and to sell it, I make it something that who buys it will also make an instant profit. In this industry, you earn your profit mainly in buying right, not selling high.

mantasmo :

I've done a lot of research into different property markets across Europe and Malta is not where you want to be buying. At 2-3% rental yields minus maintenance costs minus (very likely) a drop in property value due to overbuilding and ever increasing supply... ehh.

I do know that some people absolutely must own a home to feel like they belong and that's fine. Just don't pretend that it's a sound investment.

You clearly know more about not buying than I know about buying! :)
What about we meet half way: where you do buy and more to the point have bought and sold to make a profit!? I am listening to you friend,,,

New topic