The perks of owning more than one home
Once upon a time, owning more than one property in Malta or Gozo was reserved for the wealthy. This is no longer the case. Many people dream of owning more than one property for several reasons – you may want a second property as an investment or you may simply like the idea of having a holiday home over the summer months.
Whatever your reasons, owning a second property in Malta or Gozo comes with its considerations. It could have higher maintenance costs and it requires management time. However, buying multiple properties can be a great way to increase your assets and make some money.
Here are some of the personal and monetary benefits of having multiple homes:
Can I make money by owning multiple properties?
When buying a second home, think about whether it is located in a place where people like to go on holiday. You can use the property as a rental investment for short lets to people coming to Malta or Gozo on holiday.
You can then use the income from these short lets to pay the mortgage on this second home, as well as cover any repairs and upgrades needed. If you are able to rent your property in Malta or Gozo on a long-term basis, you could even bring in an annual profit and this can become a source of passive income. Keep this in mind and calculate projections correctly before committing to your next property.
The other way buying multiple properties can be a good investment is by buying a house and ‘flipping it’ ie. Upgrading it and then selling it for a profit. This is quite an undertaking and can be seen as a full-time job, but the profit margins could make it worth your while.
Will multiple properties bring in long-term profits?
‘The best investment on earth is earth,’ Louis Glickman
Property value in Malta and Gozo nearly doubled since 2013. The last two years have obviously taken their toll on the real estate market however the supply and demand of property mean that property is still steadily on the rise.
Essentially, if you have an amount of savings and you left it in the bank, that money will not have the same value in a few years' time. But if you took that money and bought a property in Malta or Gozo with it, the value of the property will appreciate over time. Once you come to sell it in a few years' time, you’ll get the inflated value of that property thereby increasing your investment.
Bottom line is, that you can choose to rent your second property or keep it for yourself – it will still be a ‘safe’ investment as the value of property across Malta and Gozo continues to appreciate in the long run.
Could I use my property as a holiday home?
Whether you’re looking to escape the hustle and bustle of living in a town in Malta or you want a change of scenery over the hot summer months, buying multiple properties can give you that long-term holiday vibe you’ve been looking for. Buying a property in Gozo for example could be the perfect recipe for a change of pace, enjoying summer by the beach, or even giving your family a place to escape your daily routine.
What to consider when buying a property as a rental investment
Even though buying multiple properties can have their benefits and bring in extra income, there are a lot of implications to consider:
As with any investment, rental income is not guaranteed. If there are quiet months you could find yourself without a tenant. You need to ensure you can still cover your mortgage even on those months.
You will not get 100% of the rental income as profit. There will be repairs and upgrades. Things break. Ultimately renters can cost you money. And sometimes more money than their security deposit can cover. Aim to keep an amount of money aside for these kinds of occurrences so as not to catch you off guard.
Buying property far from where you live can seem appealing – as it can double up as a holiday home etc. However, make sure you can easily access the property to fulfill repairs and check up on the place when necessary.
Finally, it's important to do your homework and find out what the tax implications are for owning multiple properties. Make sure you get clued up on exactly how the taxman will influence your investment. Again, these are things property experts can guide you on. Don’t hesitate to contact one of our experienced real estate agents at Zanzi Homes to get put your mind at rest that your hard-earned cash is being put to good and safe use.