Putting retirement savings in property in Malta


Jim Nasium

New Member

I have recently packed in permanent employment and making a go at the contract market. I have a six month initial contract with one of the big four auditing firms and if they like me there is a good few years work to be had for decent money.

This has got me thinking about saving for the future as I have not been saving enough thus far. I transferred my old employers pension to a SIPP and my original plan was to add a chunk of my salary every month. I have been reading a bunch about the markets and I don't feel comfortable with a index tracker/buy and hold approach, but then on the other hand I am not sure I believe somebody with my limited time and resources can "beat the market", so I am hesitant to stick my hard-earned cash into a pension.

My wifes family is Maltese and we go there every year. We were at her cousins house for dinner on our recent holiday, he has a lovely three bedroom flat with a roof terrace in a nice neighbourhood and told me he bought it for EUR 120,000 and believed it be be worth around EUR 140,000. A light bulb went off.

It seems like a no brainer to me, buy a house for around GBP 150,000, mortgage deposits are 10% which is affordable for me and mortgage rates are around 3%. A three bedroom house if rented to a Maltese family should bring in around EUR 500 a month and if I am sticking in GBP 500 I should be able to pay it off in 15 years (back of a napkin calc).

I have a house in London with a GBP 220,000 mortgage I bought with my wife in 2010, we got an interest only mortgage to leave us with money to get renovations done and know are going to start overpaying by around £1,000 a month. So the hope is the good contract money keeps rolling in, we pay off a fair amount of the London home and it continues to appreciate in value and in 15 - 20 years we sell up in the UK, retire to the Malta before we get to 60 and it's all sun, Cisk and Pastizzi the rest of our days.

So the risks as I see them are:

1. I am unable to find work for extended periods of time
2. I am unable to find tenants for extended periods of time
3. GBP crashes against the EUR
4. UK house prices tank

I am not really concerned with what happens to Malta house prices the way I see it, as the home there is somewhere to live, not an investment.

Any risks I am missing? If anybody is doing something similar I would love to hear any advice/comments you have.

Thanks for reading