Property Renting in MaltaMEDIA ROOM
Thinking of renting out your unused property? The right advice can spell the difference between a low return and a high-yielding investment, says Helen Raine.
Rent it to the max
Rents in Malta are relatively low compared to house prices. That means that landlords tend to achieve a lower return on their investment than in other parts of Europe. Typically, rents for a one-bedroom apartment range from around €250 to €400 while a three-bed goes from €450 to €650. However, there are ways to increase that return and ensure your property is the one going for €1000 or more.
Here’s how to turn your property into a money-spinner.
Location still counts
Think carefully before you buy because location continues to be key. Properties in Sliema, St Julian’s, Valletta and St Paul’s Bay tend to perform better than average, giving a return of about 4%. Of course, you’ll pay a premium for these spots, but you’re unlikely to ever be short of a tenant, so the extra investment will probably pay off.
Check out the competition
Think about how much money you want to be collecting in rent, then go and see some of the properties in that price range or above. Then you’ll know exactly what you are aiming for.
If you leave a food mixer and it breaks, the tenant will expect a new one. So only leave the basics to reduce costs.
Up the storage
A small apartment is much more appealing if it has some built-in storage. It’s cheap to do and will help to convince a renter that it’s the place for them. Make sure you point it out during the walk-through.
A high price is right
Price it as €990 rather than €1000. Price too high rather than too low as you can always go down again later. If tenants try to bargain you down, then agree to lower the price if they pay for longer upfront.
Give them a dream
To attract affluent tenants, you need to ensure that from the moment they open the door, they see the lifestyle that they aspire to. Spend a little more on furnishings for a sleek, modern look in a newer apartment (the furniture doesn’t need to be new, as long as it is in excellent condition) or find some quality antiques for a house of character. You want the person viewing your property to feel that they will be living the dream.
The party is in the kitchen
When it comes to kitchens and bathrooms, if you’re wallowing in 1980s and early 1990s décor, spend the extra cash to get them replaced. It will increase the value of your property anyway. But if the bathroom and kitchen are reasonably modern already, just make them look extra clean. Get rid of mildew spots on the sealant and ensure there are no stains anywhere. Buy new light fittings or modern taps and shower heads to lift a slightly dated bathroom.
List it right
Take time with your advert. Pay a bit more to include photos. Add key phrases like ‘park’, ‘leafy’, ‘quiet’, ‘close to shops and restaurants’, ‘high standard’, ‘quality finishes’, a local school name and so on. Include as much detail as possible and make sure it’s easy to get hold of you on the day the advert goes out. If you’re aiming for professionals working in the gaming industry, who tend to have some of the highest wages, ask a friend there to send out a circular about your property. Think of your key market and target them directly.
Decrease your overheads
If you’ve had the property for a while, talk to different banks about a new mortgage package; current low rates might work in your favour. Shop around for a new insurance quote. Control maintenance costs by painting walls instead of wallpapering and using extra large tiles so that there’s less grouting that needs cleaning.
Light it up
Light matters; make sure your place is as bright as it can be. Open the blinds, windows and doors and let the light flood in. If it still feels a little dingy, install some clever, recessed lighting, which can also be dimmed to create a cosier atmosphere. Light tubes are also very effective. These are a pipe to the roof with a domed top and a reflective lining, which allows natural light into otherwise dark spaces such as bathrooms or hallways.
Reduce and reuse
It’s tempting to completely gut a new place and start again, but your tenants might not be as careful with your newly-renovated property as you would be and your refurbishment will take a long time to pay off. If possible, clean carpets rather than replacing them, touch up or clean paintwork unless you really need to repaint and repair existing cupboards, as long as they don’t look too dated. You need to strike a balance between creating the right look and spending more money than you can realistically recoup.
Clean as a new pin
Hire a professional cleaner. It’s worth it. The cleanliness of your property needs to pop out for a new tenant.
So you’ve done the cleaning, the fixing-up, wheeled in the modern / antique furniture and created the dream. Now it’s time to create demand. Advertise the property, then advise everyone to turn up for an open house on the same day. Not only is this considerably less hassle than arranging a dozen separate viewings, but you will create a buzz when the prospective tenants see others viewing ‘their’ flat. Make sure you look the part; dress as a professional and you’ll be treated as one. Keep a stack of application forms and pens in the hallway. You’ll likely have more than one deposit cheque in your hand by the end of the day and can select the most solvent tenant with the best references. They are more likely to look after your property well, which will save you money too.
Keep your tenants happy
It costs money to get new tenants. You have to spend your time finding one, the property may be empty for a while during which time you’ll have no income from it and you’ll need to have it cleaned and updated. So try to keep the current tenants for as long as you can. Respond promptly and politely to requests for help or maintenance. Keep a record of your correspondence in case of future problems. Keep receipts so that you can write these expenses off against tax.
Source: The Sunday Times of Malta 23rd March 2014