4 Types of Rental Investment Properties in Malta

The islands of Malta and Gozo are ideal locations where one can safely purchase a property of sale of any size, category, and potential with the aim of creating a trustworthy rental investment. The fact that the islands are very small and that space is quite limited does not seem to create any difficulty in providing a steady supply of investment opportunities.

Whether a Maltese national or a foreigner, buying real estate as a rental investment is a possibility here. There are various options to consider and we are here giving some guidelines to help readers decide on the best property investment they can make for long term reliability in the sphere of letting.

Starting your first investment

Prior to starting the search for your first property investment, it is important to look at the particular types of rentals which would help you to maximise the return on your purchased investment. In the eventuality that you decide to let out your purchased home, selecting the suitable property for future leasing is critical.

Long-term vs short-term rentals

Buying property to let as a long-term rental yields a steady monthly income from one source. Whereas a short-term rental yields you higher rental income from various sources that are not guaranteed. If you have the energy to advertise your property in foreign and local websites and take care of weekly maid services, communicating with potential renters and accepting bookings, then a short-term rental investment may suit your needs.

Property investment location

Choosing the location of your property investment is very important. Before buying the property, one should take note of the areas that are the most popular for property rentals with tourists and individuals working in Malta. Every individual is of a different category ranging from students, bachelors and small families, to upmarket individuals seeking the best of quality and luxury. 

For instance, tourists are mainly looking to wind down and relax on the islands, or are after a busy few days of culture and history, hence, a villa for rent in Gozo or a house of character in the narrow streets of Zurrieq might fit well to their desires. The point here is that each category of potential customer generally has a different budget, with specific needs and requirements. Read more about buying and investing in Malta.

1. Small property investments

Invest in a small, one or two-bedroom apartment such as a bachelor’s pad, a one-bed penthouse, or a small maisonette in a thriving hot spot such as St. Julian’s, Paceville, Sliema, Bugibba, Qawra, Xemxija. These smaller properties sometimes yield the best rental return depending on the market. This return can be anywhere from 4% to 8% per annum.

2. Investing in large or medium-sized property

Invest in a larger medium-sized property with two or three bedrooms such as an apartment or maisonette. Depending on your strategy, you may choose to accommodate the English Language schools or simply cater for smaller families or couples.

The locations that would work for upmarket clients would be Swieqi, Ta’ Xbiex Ta’ L-Ibraġġ, Sliema, St. Julian’s; whereas if you are looking for medium market clients you would look in the following areas: Msida, Valletta, Gżira, Tal-Qroqq, St. Paul’s Bay and Marsascala. Rental yields are still substantial and may range from 3.5% to 6.5%.

3. Investing in small and old property

Purchasing a rental investment in Malta by investing in a small and old property such as a little townhouse or house of character located in The Three cities, in Valletta, in Rabat or in one of the quaint old towns such as Zejtun, Balzan or Tarxien. This kind of property for sale, if converted to high specifications, will attract the out-of-the-ordinary rental clients who are looking for a little tranquillity and want to avoid the hustle and bustle. 

4. Investing in Special Designated Areas

Lastly, invest in a Special Designated Area (SDA). These types of properties in these areas are not only rising rapidly in demand from foreign buyers but also yield excellent rental income. If you are looking for a place to move into when the kids move out, somewhere like Portomaso, Tigne Point or Fort Cambridge would be ideal as a property investment. The advice we’re giving is that you should buy now, whilst prices are still affordable, and so when that day dawns on you, you would have rented the property for a few years and the place would be ready for you. Other SDAs are also interesting prospects.

Local real estate agencies

At the end of the day, do follow the guidelines of a reputable estate agency before buying real estate as a property investment. A credible real estate company in Malta, like RE/MAX Malta, will have specialists in rental investments that will assist not only with the search for the ideal property you have in mind, but also help you with closing the sale, finding you the right tenants to let your property and ensure that are provided the necessary paperwork to safeguard your interests. Read more tips about investing in Malta property.