Bricks and mortar have always been one of the strongest investment classes, even more so when planning long term. Here’s why you should invest in property:
Invest in Property – It’s safe (as houses)
The well known phrase, ‘ safe as houses’ was coined for a reason, and it can’t be truer. According to the latest figures or the Property Volume Index (PVI), the value of transactions in the first quarter of 2015 increased by 11.9% when compared to the same period last year. In the last 8 quarters, malta has seen a repeated increase in price after a very short slump in the late 2012, making it a low risk investment.
“When you consider the risk and return one has to consider when buying properties and shares, property wins hand down” says lecturer, investor and author Peter Koulizos. “shares have a (slightly) higher capital growth, but with a considerably higher difference in risk. The fact that returns and capital growth (or loss) on shares can range between +30% in a year to -30% in a week! You can’t get that sort of shift in property, hence why it’s considered a much safer investment.
Getting started is simple.
You don’t specialist knowledge to get onto the property ladder; in fact, loads of investors that start off in property would have never actually thought that they would make their fortune through property. They usually start off by just buying a home to live in! It’s only after seeing the value of their only property increase, and seeing the money they can generate, that they take the leap and turn into investors.
Research is easier than financial markets.
Gambling on the stock market requires a education. It is essential to grasp how the system works, understand the difficult world of trading (without going into the different types of instruments used), as well as fund managers and research brokers. After doing all this, you then need to get to speed with the companies that are traded on, by scouring newspapers, financial articles, annual reports, company press releases etc.
On the other hand, investing property is considerably simpler. You can basically just go online, and start seeing properties. In fairness there is a bit more to it than just picking a property, but a lot of research can be done online without any cost, or else by visiting areas of interest, auctions or open houses without prior training.
Getting finance isn’t hard.
Lenders love property, even though won’t show it. Home loans are a significant part of all banks business models, and are happier to lend to individuals willing to purchase a property other than any other loan. Testimony to the fact is that they will fund up to 90% of the amount required at the lowest interest rates. Thus making it much easier to borrow if you don’t have enough capital.
Whatever your budget, there’s an investment for you.
A short gaze to our website shows that the rhetoric that property in Malta is not affordable, is far from the truth. Well, if you are looking to buy on the Sliema seafront will likely set you north of half a million euros for a two or three bedroom apartment, but properties which aren’t sea front, and maybe in neighbouring cities like Gzira, Msida, St Julians and Swieqi can offer more affordable entry points. If you bide your time and buy smartly, you should expect equal or better growth than more pricey assets.
Price is flexible
If you buy a share, you buy it at the market price at that time: there’s no scope to negotiate. In the property market, it’s exactly the reverse: buying and selling is all about negotiation. You (or someone working for you) can talk down a vendor; equally, a motivated buyer could pay over the odds for the right property. There’s also huge scope to find undervalued properties, particularly deceased estate or mortgagee sales, or sales due to divorce.