In recent years reports and statistics have revealed a considerable increase in the number of people investing in rental properties and therefore becoming new landlords. Indeed, for some, buy to let Malta property has become an alternative to other forms of investment.

Unlike banks and investment instruments such as bonds, property gives a double return: income in the form of rent plus capital growth, and in some areas capital growth has been quite outstanding. The income (initial yield) should be enough to cover your mortgage payments, with a margin for safety built-in.  At first glance Malta property is a foolproof way to wealth and security: once the place is successfully let all the landlord has to do is sit back and watch the money roll in! Well, it’s not quite as easy as that, but a properly managed property investment can be a very good way of increasing your wealth. There are pit falls though and if the management side is neglected you could have real problems. 

Letting is a relatively complex area which requires a fair amount of knowledge. The best option would therefore be to use a real estate agent in Malta to do your lettings and thus minimise the risks related to market knowledge and maximum promotion.  For the tenant, renting has become a convenient alternative to buying and for some it has become the only option:

• Job mobility, job insecurity and short-term work contracts mean that many are now wary about becoming locked-in to owning a property.
• Co-habitation prior to marriage again means that couples are often reluctant to become looked-in to a property and a large mortgage, which may be difficult to unravel if there is a split.
• Higher divorce rates and an ageing population, with people in general living longer, has increased demand for housing and particularly single person accommodation.
• In some high-priced areas first time buyers in Malta have been priced-out and renting has become the only option. 

For the landlord, whether it’s a side-line to an existing day job or a full-time occupation, buying to let a Malta property has become an alternative to other forms of savings and investment:

• Renting property in Malta has become more socially acceptable in Malta, though there is still a long way to go before we reach mainland European and US levels. 
• We have entered a more sympathetic legal climate for the landlord.
• Buy-to-Let mortgages have meant that property investment has become a real alternative to stocks & shares, with an added bit of satisfaction and excitement for those who take to it.
• Low interest rates offered by banks encourage people with some capital to look for better returns: property is generally a solid form of investment and rarely can you lose all your money, as you can with stocks and shares.
• The volatility of the stock markets have made some consider property and “landlording” as a safe alternative. 

Many start-out buying and letting as a side-line and end up owning a portfolio of properties large enough to support them financially – indeed there have probably been more millionaires created in Europe from property related businesses than almost any other occupation. Furthermore, there is an added incentive to enter this field as it is now being predicted that early retirement may not be an option for most people and that pensions may not provide all we desire in old age. 

Look out for the next article that will give you an insight on Residential and Commercial investments as well as the customers that rent them.

Written by:

Andrew Agius Muscat – Business Management Analyst

Mr. Agius Muscat is a Business Management Analyst who has extensive back ground in the business world.  He is presently the Chief Executive Offices at the Malta Institute of Management and has held several top management positions. He recently held the position of Group Strategist and Planner for Attard Bros Group, a real estate developement and construction company in Malta.

Tags: Buying property in malta, letting, Renting property in Malta, Investment Property, ideal for first time buyers or rental investment, Relocating to Malta, Andrew Agius Muscat, remax malta letting, General, First time buyers

About a decade ago when I was still in the early stages of my career I was assigned as a marketing expert to a consulting project on the development of a major construction project spearheaded by John Lobee.   John was an international acclaimed British civil engineer who had worked throughout the world.  Despite the age gap, friendship struck as we shared common interests such as a passion for innovation, art and music.  John’s philosophy about life and architecture (which he perceived as intertwining) revolved around a sincere respect for the environment, simplicity, and space.  Pointing to his loyal black cat which lazily slept all day in his office, John used to tell me that like cats, humans need to have their space to relax.  And it is about space that in today’s blog I wish to share some thoughts with you.

In our modern, technological world, most of us spend a major part of our lives indoors.  In the nature of things, home means an indoor place – a room, an apartment, a house, a mobile home, even a trailer or van.  We study in schools and colleges, eat in restaurants, and work in shops, factories, or offices.  We are born in hospitals and may die there, too.  While most of us spend time out-of-doors, walking from one place to another, attending or participating in sports events, enjoying a garden, sailing, hiking, or even camping for a more extended period, these all tend to be brief interludes in lives spent largely inside human-created structures.

Indeed, if we estimate the portion of an average day spent inside some sort of enclosing space, we will probably find we typically spend about 90 percent of our time, with only 10 percent outside.  However much we may love nature, most of us must face the reality that modern life goes on, most of the time, inside.  If we are to be honest, we must also face the reality that many of the inside spaces where we spend our time are unsatisfactory.  The rooms, corridors, and lobbies of typical schools, hospitals, offices, shops, and factories are often crowded, disorganised, unattractive, and depressing.  At home, where interiors should be the way we want them, limitations often lead us to settle for compromises.

Obviously any enclosure serves several basic purposes.  It protects us against the weather; it provides privacy; it gives us places where we can keep the things we need in some more or less convenient relationship.  While enclosure is basic to these needs, it is only a first necessity.  Within enclosure we need equipment; places to sit and lie down; surfaces where food and drink can be prepared and served; places for work, reading conversation, and entertainment.  Increasingly, most of these activities demand special technology – for storage and communication; for cooking and refrigeration; for reproduction of sound and image.

Accordingly, in choosing a house, office or any other space it is critical to choose that Malta property which has enough flexibility in layout to adjust and fit to your space requirements.  What’s good for me may not be good for you so it is very important that before falling in love with a property in Malta and hence taking the decision on buying a property in Malta, one must make a thorough self examination of what kind of space requires to lead a normal relaxed life.  If you are an animal lover; if you enjoy having a library at home; if you love watching films; if you love cooking; if you have dependents; if you enjoy hosting, if you enjoy your privacy; and more, all have their implications on the type of property you require to buy.  Buying a property in Malta or house which is nice but uncomfortable is definitely a bad decision which is not easily retracted.  An uncomfortable home will lead to stress and the occupants seeking all type of excuses to get out of it and stay outside – leading to additional unnecessary costs and pressures.  An uncomfortable commercial outlet will do injustice to the displayed products and also repel customers.  An uncomfortable office will lead to a de-motivate staff and hence decline in productivity.  So when speaking with your trusted Real Estate agent in Malta confide with him/her the characteristics of your life-style so that together you will identify that space which best fits you… to identify that space that you will enjoy and relaxes you … just as John’s black cat had found.            

 

Andrew Agius Muscat

Business Management Analyst

Mr. Agius Muscat is a Business Management Analyst who has extensive back ground in the business world.  He is presently the Chief Executive Offices at the Malta Institute of Management and has held several top management positions. He recently held the position of Group Strategist and Planner for Attard Bros Group, a real estate developement and construction company in Malta.

  

Tags: Andrew Agius Muscat, good entertainmnet space, Buying property in malta, bright and spacious, andrew agius, Relocating to Malta, Andrew Agius Muscat, General, Home improvements, Design

I vividly recall from my childhood my mother, while gently tucking the bed sheets around me in bed, telling me the old fairy tale of an old lady living in a shoe.  Yes it is some time ago now, yet I still feel that sensation of amazement I used to experience as my mother described in detail how this old poor lady exploited, or better still using today’s jargon recycled junk to turn it into a cosy little home; poor in materialism yet rich in ingenuity.

This experience was resurrected in my mind as during the past month I was following the debates held during the United Nations Climate Change Conference held in Copenhagen.  What the old lady in the fairytale made look so easy our politicians in this day and age are still finding it difficult to embrace… and here I am referring to pure and simple logic – respect to our surrounding without which we will all be caput! More than logic, it is also economically rewarding.  With sky rocketing fuel and energy prices our purchasing power is being aggressively eroded leading us to increasing pressures and discomforts.

My point therefore for this month’s article is investing in a facility that adheres to green building standards and performance efficiency is a smart and responsible decision. When considering the value energy efficient and environmentally friendly buildings can bring to the Malta real estate market, it seems as if going green is the wisest of investments.  Indeed, the practice of “going green” has been gaining popularity within the last decade. Throughout Europe, the real estate industry is adapting a rating scheme for energy efficient homes.  Eventually, the more energy efficient your home is, the less property tax will be owed.  Understandably, in the Malta property market there is no real estate tax, however Malta too will one day have to adapt to European standards. It is widely recognised that it is important to ensure that we do our best to lessen mankind’s harmful impact on the environment, and the government is offering tax incentives to those who take on environmental challenges with green building practices. Our society as a whole is changing the way it sees building, living and working. That’s why living and building “green” is more attractive than ever to both residential and commercial Malta real estate investors. Green building design consultants can help a facility reach its efficiency goals. Green design can alleviate and reduce exposure to toxic materials, as well as ensure the conservation of non-renewable materials and energy which eventually will save money either indirectly or directly.

When it comes to green facility construction, a green design consultant will make sure the building process minimises the ecological impact of building as well as oversee the construction to guarantee the protection of local water, soil, air, plants and wildlife. When designing a green facility, it is important to take into account the lifestyles of those who will be using the building. Make sure the facility offers support of transportation alternatives, such as walking, mass transit, biking and alternative fuels. Incorporating design features that will make it easier for commuters who use non-traditional transportation is a responsible and modern necessity. You may think that going green and increasing building performance efficiency would cost a lot of money. While this has been the case in the past in the Malta property market, it is becoming more and more cost effective.  In fact, green design and building often costs the same as traditional building methods. And with all the money that can be saved through efficiency and recycling, green building can actually cost far less than traditional methods over the long run.

Malta property owners and businesses are far more likely to invest in a green building if they understand that they will reduce their cost which at the end of the day spells out more profit if you’re in business and lower utility bills if you’re a property owner.

As green building continues to gain popularity, tax incentives will also increase. So if you are buying real estate in Malta confide with your trusted real estate agent about the potential of acquiring, converting or developing a green designed property.  This indeed is a sound investment for the future both from a pocket and life perspective.  Let’s learn from the wisdom of that old lady living in a shoe.

PS.  Happy birthday dear mother…

 Written By:

Andrew Agius Muscat – Business Management Analyst

Mr. Agius Muscat is a Business Management Analyst who has extensive back ground in the business world.  He is presently the Chief Executive Offices at the Malta Institute of Management and has held several top management positions. He recently held the position of Group Strategist and Planner for Attard Bros Group, a real estate developement and construction company in Malta.

 

 

Tags: green building, malta-once-upon-a-time, Andrew Agius Muscat, investment, apartament in tigne point, the old lady in the shoe, andrew agius, Buying property in malta, General, Andrew Agius Muscat

I vividly recall that when I was a young boy Christmas was a time to look forward at.  Parties, presents, Christmas Father, participating in and most often winning the Father and Son Crib Competition at school and last but not least a short break from school following the hated and sarcastically branded Christmas Exams.  Of all however what used to impress me most was the dominating figure of the angel placed on top of our modestly decorated Christmas tree at home.   ‘But why on top of the tree?’ I once asked my grandmother who never missed the annual appointment of the traditional Christmas lunch at our home.  ‘The Christmas Angel brings the good news of hope to all humanity in a World that is in crises’ was her prompt answer emphasised by her typical loving and caring smile.  I felt the answer satisfied my curiosity even though for a nine year old boy it didn’t really mean much. 

Now that I have grown older and my grandmother is no longer, every time I come across an angel on a Christmas tree I recall and understand better what she meant.  Hope, or better the capability to be positive in times of distress is probably the greatest of all virtues that one may possess in life.  This in particular when the World we live in is apparently passing through unprecedented economic and social troubles.  For those like me who have a keen interest in the developments of the global real estate market can understand well what I mean.  Lately the property market has once again hit the headlines of the international news with the newest crises being announced in Dubai. The property developer Nakheel which epitomised Dubai’s rise, turning elaborately arranged man-made islands into some of the most sought-after properties in the Emirate, is in dire financial trouble.  Indeed, the property market anywhere in the world is not exactly a bed of roses at the moment.  Such negative feeling is further accentuated by sluggish international economic growth, talks of mass dismissals, food inflation, sky rocketing fuel prices and the ‘credit crunch’ seems to be the buzz word on the mouths of many. 

There is also no point denying the fact that the developments on the global economic level have an impact on the local level.  This was the latest underlying argument of the Minister of Finance in presenting the 2010 budget for Malta as a strategy to sustain employment levels and boost economic regeneration.  Behind these pressures perhaps the last thing most people think about are the benefits of such a situation.   When it comes to real estate it is easy to see the problems, ranging from difficulty getting loans; to, owning property which cannot be easily liquidated in time of most need; or, worse off paying mortgage for a home that is now worth less!  But referring to my Christmas Angel for inspiration there is a bright side to this view. 

To begin with, don’t we normally love the idea of lower prices? Certainly we would love to see a 20% decline in the price of cars or food. What makes real estate in Malta different is that we use it but don’t “consume” it. It is in part an investment that we may have to sell someday. If you were in a house for life, the value could fall by half and it would make no difference. In fact, you might even get to pay less for both property taxes and insurance as a result of the lower value.

That brings up the first benefit of the affects of a recession on real estate: lower prices and lower expenses. For those who have not bought a home yet, this is an opportunity, isn’t it? Certain property in Malta has been reduced to as much as 15%. With that comes lower payments, lower insurance, and lower property taxes. This may be the best time to buy. Isn’t that good news?

But what if you already own a property in Malta? Is there any benefit from the recession affects on -real estate in Malta for you? Possibly. If you have ever thought about moving up into a more expensive  property, this may be a great time. You may have been thinking it’s terrible that your own property is worth €15,000 less than it was five years ago, but what about the bigger home you have wanted? It may be selling for €35,000 less than a few years back. That’s an opportunity. That’s good news! 

But there are two more long-term benefits to the whole real estate scenario we are experiencing. One is that prices  of property in Malta are getting back in line with what is actually affordable. People with ordinary jobs may once again be able to buy a property, which means that prices can stabilise soon. And by soon I mean soon.   Let’s face it, prices just went up too fast and too far. Many who overstretched their affordability budgets to buy a property in Malta only did so with the hope to hang on long enough to sell for a profit. The market made gamblers out of home buyers, and the last ones to play lost big. That brings us to another benefit of this housing slump: Big lessons; 1) Plan your investments and future relative maintenance costs; 2) Assess the risks – don’t take anything for granted; 3) Be prudent and seriously consider your actual (not potential!) affordability index before engaging in considerable investments; and 4) Today, you may need the expertise of a reputable real estate agent more than you think to achieve you the best possible price. 

We learned that in considering investments we should be talking about calculated risks rather than gambling. Blindly investing significant amounts of capital simply because others were doing so and apparently getting rich overnight was just insane. Many took it for granted to consult an interior designer before buying a kitchen but simultaneously got engaged in real estate investments (most often meaning that they have to pay excessive mortgage rates for a life-time!) without even consulting with real estate professionals believing that the commission paid to them was a fee that could be easily be done without. With hindsight such common logic was indeed myopic if not suicidal in certain cases!  Though the reaction to these and other mistakes in finance and investment may go too far, the lessons of this past decade will be remembered for a while, and that hopefully means there won’t be a repeat of the run-up in prices based on outrageously easy loans, and therefore there may not be another huge housing slump in our lifetime, nor another banking crisis based on it.  

May you have a joyous Christmas and a New Year full of good news!

 

Written by:

Andrew Agius Muscat 

Mr. Agius Muscat is a Business Management Analyst who has extensive back ground in the business world.  He is presently the Chief Executive Offices at the Malta Institute of Management and has held several top management positions. He recently held the position of Group Strategist and Planner for Attard Bros Group, a real estate developement and construction company in Malta.

Tags: festive season, property malta, Andrew Agius Muscat, why is malta real estate so expensive, Andrew Agius Muscat, News, malta real estate, Buying property in malta, General, andrew agius