Property: Buying vs Renting

I'm not sure I want/need to discuss my finances publicly lol. In the end if someone chooses to buy in Malta without doing proper due diligence it's on them. Maltese landlords are desperate to get those properties off their hands so good for them.

I found a property for under 50k, It's 2 bedroom but fully furnished.

http://maltapark.com/item.aspx?ItemID=3895696

This isn't the one I mentioned above but an example to show what one can buy for under 50k = £36k

mantasmo wrote:

I'm not sure I want/need to discuss my finances publicly lol. In the end if someone chooses to buy in Malta without doing proper due diligence it's on them. Maltese landlords are desperate to get those properties off their hands so good for them.

Yes, I didn't expect more.

New Horizonz wrote:

mantasmo wrote:

I'm not sure I want/need to discuss my finances publicly lol. In the end if someone chooses to buy in Malta without doing proper due diligence it's on them. Maltese landlords are desperate to get those properties off their hands so good for them.

Yes, I didn't expect more.

This saying comes to mind: all talk and no trousers. 

New Horizonz wrote:

I found a property for under 50k, It's 2 bedroom but fully furnished.

http://maltapark.com/item.aspx?ItemID=3895696

This isn't the one I mentioned above but an example to show what one can buy for under 50k = £36k

finished not furnished

Finished means windows and doors not sofa and tv

The furniture is shown in the photo also with the remaining 1k the missing items could be sourced. I would peobably pay around 40k for this.

New Horizonz wrote:

This saying comes to mind: all talk and no trousers.

I'll be in Malta at least twice this year. Do you mind showing me around that <100k property you're looking at? I'd honestly like to see what I'm missing.

New Horizonz wrote:

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.

6% ???

That just goes to prove that you should never listen to anything estate agents tell you.

According to this website, the gross rental yield in Malta is around 3.23% and they give Malta a Long Term Investment Rating of Very Poor.

http://www.globalpropertyguide.com/investment-rating

I'm not even sure 3.23% is a true figure. I know that the last place I stayed in was up for sale, I know what the asking price was and I know how much rent I was paying. The gross rental yield for my previous landlord in the year I stayed there was 2.1%. Slightly less than the ambitious figures of Frank Salt. When you add in tax and maintenance charges on top of that, the net figure is probably closer to 1%.

As for Capital Gains on Maltese property, at the current prices you won't get any, all you will get is Capital Losses. Almost all property in Malta is completely over-priced, it's on sale for about twice the price of what it's worth IMHO. Have a look at what you can buy in Malta for between €600k - 900k and then compare that to what is available in Spain, the south of France, Portugal, the Canary Islands for the same price. The differences are astronomical, believe me, I know because I've been doing a lot of research recently.

And the build quality of everything I've seen in Malta is dreadful. None of the 3 places in Malta I have lived in have been air-tight or water tight, wind howling through massive gaps in the windows and doors, puddles of water pissing in when it rains!! I've got 3 toilets in my current house, none of them have a cistern, I have to spend 5 minutes most mornings trying to flush away a jobbie. It's soul-destroying, I don't even want to think about how many hours I might have spent in the last year with my finger glued to the flush button. Welcome to Malta!!

I've worked in more than 15 countries around the world, a lot of them would be considered as developing countries, Cuba, Central America, South America. Everywhere I have been has a much higher quality of apartments and houses than Malta. They are the worst I've ever seen, I wouldn't touch property here with a barge-pole. If you buy in the current market, you need your head examined, you should be certified.

When the next financial crisis hits, house prices in Malta will crash, big time. And it's not far away IMO, the Eurozone is like watching a car crash in slow motion, it's doomed. There is a massive over-supply here and none of the Maltese can afford to buy them at current prices. Some of the locals are taking out 45 year mortgages just to buy a 2-bed apartment, they can't afford anything else on their wages. There's only one direction house prices are going in from their current position, and it sure as hell isn't up.

We have two rental properties in Malta.
One in Sliema 1 bedroomed in DEPIRO POINT bought for 135,000euro that was last year.
We have long-term tenant 650 pm fully furnished.
Our other flat in St Julian's Spinola bay bought in 2009 1 bedroomed 100,000euro.
We use that for short lets fully furnished.
This year turning it into long lets.
Do all my own advertising have no agent.
Don't intend to live in Malta in the near future.

When done it up and if decided to sell and put it on the market,  yes, with pleasure,

On An Island,

You and I aren't on the same wavelength. I am not looking for 900K properties. I am looking for the ones that rent well. sell well at a profit.

Look at the example I showed. If bought something like this for 40k, rent it as is for 300 a month, and it never be left empty at this price. It gives you 9% return LOOK no theory, no bs: pure fact and figures: entirely doable.

Your way of thinking and hypothesising is good for a PhD programme, I have spent enough time studying. I have seen how they spend their day and what makes them tick. I didn't and don't fit in as I soon get bored by lack of results/deliverable/execution of plans/generating profits/cash in the bank: the bottom line.

Thanks by the way. I will take a closer look at your post later.

id guess there are many more who lost than gained.....

good luck to you and your plans

You're right Toon: property prices had gone too high and had to come down
Losses resulted from speculation. Making a loss is a risk and inherently present.

New Horizonz wrote:

When done it up and if decided to sell and put it on the market,  yes, with pleasure,

I prefer to see it in its original state, even if you don't end up buying it and renovating. I've worked some with renovation properties and it's always interesting to see properties before any work is done on them.

MalteseCross wrote:

We have two rental properties in Malta.
One in Sliema 1 bedroomed in DEPIRO POINT bought for 135,000euro that was last year.
We have long-term tenant 650 pm fully furnished.
Our other flat in St Julian's Spinola bay bought in 2009 1 bedroomed 100,000euro.
We use that for short lets fully furnished.
This year turning it into long lets.
Do all my own advertising have no agent.
Don't intend to live in Malta in the near future.

Those are great yields for Malta! Price a little high(ish) for my liking/return because they aren't likely to go up in price at all over say 10-15 years.

You also bring up a great point - buying small apartments in very central locations is perhaps the safest way to go. Even in bad markets such as Malta. Same applies to Vilnius (Lithuania) - property prices gone through the roof, but there's always someone looking for a small rental right in the city center and those have decent rental yields (5-7%) but not likely to go up in price any more because already at 90-120k euro+ right now for one beds.

Then, for example, you have Kaunas (another city in Lithuania)... huge amount of rental properties at very low prices (80-250 euro/month) BUT there aren't that many rentals in the very center (which is also incredibly nice) and people are prepared to pay anywhere from 350 euro/month all the way up to 500/month for good one bedroom apartments. Prices are about 40% lower than in Vilnius making them a great rental investment (but you have to know the area really well). So a bit like Malta really: buy anywhere but central and you're stuck with a piece of crap property and low rental yields. Buy right in the center and you get the 1-5% willing to pay 450-500/month for a 60-70k euro property (or 600-650/month for a 130k euro apartment in Malta).

bottom line is  - vision and managing expectation.

mantasmo wrote:

New Horizonz wrote:

When done it up and if decided to sell and put it on the market,  yes, with pleasure,

I prefer to see it in its original state, even if you don't end up buying it and renovating. I've worked some with renovation properties and it's always interesting to see properties before any work is done on them.

You're very curious my friend and like to ask a lot of questions....
You also like to make grand statements but when asked to elaborate, eg: how you can tell about quality of a project by looking at it from the street, you don't see the need to say. You don't like to answer....
Is this consistency and fairness?  Is this indication of your approach and jedgement? Is this telling about contents of your character?

No worries New Horizonz, if you think that you can make a sound investment in property in Malta, and you've done thorough research, go for it, good luck mate. I just think that there are some absolute bargains in Europe at the moment and I wouldn't consider Malta as a good place to buy, in fact I think it would be a massive risk.

One of the basic fundamentals of the free market economy is that prices are driven by supply and demand. E.g. house prices in London over the last few years, a chronic shortage of properties and massive demand. The recent oil price slump, too much supply thanks mainly to US Shale, possible weakness in demand due to the state of the global economy, hence the drop in price of more than 50% from $110 a barrel.

In my opinion there is a massive over-supply of properties in Malta, it is not a seller's market. Add to that the rate of construction seems to be increasing, they are building virtually everywhere. And demand is weak, the Maltese can't afford most of these properties on their income, is the average wage in Malta not around €12,500 a year? How many foreigners buy properties here, most people I come across rent, the % of people who have bought here must be very low.

So who is going to buy all these properties? The basic laws of supply and demand says that house prices can't rise much higher than their current value, and there may be a significant risk on the downside. Especially if the Eurozone implodes in the next few years. But that's a completely different discussion.

New Horizonz wrote:

mantasmo wrote:

New Horizonz wrote:

When done it up and if decided to sell and put it on the market,  yes, with pleasure,

I prefer to see it in its original state, even if you don't end up buying it and renovating. I've worked some with renovation properties and it's always interesting to see properties before any work is done on them.

You're very curious my friend and like to ask a lot of questions....
You also like to make grand statements but when asked to elaborate, eg: how you can tell about quality of a project by looking at it from the street, you don't see the need to say. You don't like to answer....
Is this consistency and fairness?  Is this indication of your approach and jedgement? Is this telling about contents of your character?

No idea what you're trying to say here tbh.

Perhaps #26 and #41 above as examples, would help.

it is possible that the maltese (most of whom prefer to buy and not rent)  maybe take buy to let mortgages and then rent the bought property to long term renters and thus make more cash thus enhancing their income...

Channel 4 right now has a program called a place in the winter sun where they are buying a place in Malta with a £70k budget ... It will be on 4od later I'm sure

just watched that and its a pile of garbage not even close to reality

"all properties are finished within three months"

there were so many glaring faults in the statements the presenter made and in the dialogue  - ive lost all faith in that show

Toon wrote:

just watched that and its a pile of garbage not even close to reality

"all properties are finished within three months"

there were so many glaring faults in the statements the presenter made and in the dialogue  - ive lost all faith in that show

Same. What the... I used to watch it from time to time.

Yes toon I also thought the expat women they interviewed was living in some kind of cloud cuckoo land she aaid there was not traffic etc

Also she said buses were £2 return which isn't true


It was filmed in December 2013

Was that the one where it was a young guy with his aunt or gran? He looked at a house in Three Cities and a few in Sliema but ended up buying the last place he saw, an apartment in Qawra?

Yes that was the one , he bought the house in Qawra in the end
http://www.aplaceinthesun.com/tvshow/ap … ode24.aspx

OK cheers, it must be a repeat then, I saw that one last year at some point.

and i had to laugh at the nice little patio  teerrace  - it was shaft...... !!!!!!pmsl

then the the agents indicated ...  blah blah

and finally the other offers ghosting in last minute....

and i had to laugh at the nice little patio  terrace to entertain in  - it was shaft....great for listening to everyone elses dumps coming down the down pipe.. !!!!!!pmsl

then the the agents indicated ...  blah blah

and finally the other offers ghosting in last minute....

Toon wrote:

and i had to laugh at the nice little patio  terrace to entertain in  - it was shaft....great for listening to everyone elses dumps coming down the down pipe.. !!!!!!pmsl

I can actually remember that, I know exactly what you are talking about and it must have been about 6 months ago I watched that program, when it was on the first time around. I specifically remembered the house in Three Cities too, it was tiny but she took them up on to the roof terrace and they had this horrendous view of the docks. Great if you're into crane-spotting!! But the presenter was talking up the view big time - "look at the beautiful panorama you have here". It's a #^%$*^& crane my dear!!! Looking down on hairy-arsed dockers and welders every day. It's like trying to talk up a council flat in Govan.   

What's that old saying, you can't polish a turd?? They do try quite hard on that program at times though.

exactly my thoughts.....

One to add to the watch-list, a new episode featuring Malta and Gozo, this Sunday at 1755 CET on Channel 4. I wonder what fantasy stories we'll get told this time about the housing market in Malta.

If "Joy prefers a peaceful lifestyle in rural Lincolnshire", I'm not sure she'll be too keen on Malta. 

Maybe that's why Gozo is also mentioned.

http://www.radiotimes.com/episode/dj7j7 … --19042015

will definitely watch that one.

seen that one before but if you haven't seen it then its worth a watch.

g4jnw wrote:

seen that one before but if you haven't seen it then its worth a watch.

Are you sure? It's a new episode according to the Radio Times and the Channel 4 website.

On An Island wrote:

g4jnw wrote:

seen that one before but if you haven't seen it then its worth a watch.

Are you sure? It's a new episode according to the Radio Times and the Channel 4 website.

My mistake just looked at the one i recorded and its a different couple  so will record it thanks

They started showing new episodes of it a few weeks ago, the new ones only seem to be on a Sunday night at the moment. I am a huge fan of that show, I will admit. Especially the ones with the blonde girl in them, Laura Hamilton. I don't care where she ends up in her episodes, I'll be watching. 

On An Island wrote:

They started showing new episodes of it a few weeks ago, the new ones only seem to be on a Sunday night at the moment. I am a huge fan of that show, I will admit. Especially the ones with the blonde girl in them, Laura Hamilton. I don't care where she ends up in her episodes, I'll be watching. 

i have a thing for the blonde one too think his name Jonnie lol