The decision to buy a property in Portugal is often connected with the idea of getting more income from that property. The Portuguese real estate market has always been well balanced, with a guarantee of interesting profitability. In the past, only the great global crisis of 2008/2010 caused a marked loss in the Portuguese real estate market, which recovered energetically from 2015 onwards.

With the Covid-19 pandemic, in March 2020, there was fear of a real estate recession, which never happened. The Portuguese real estate market is resilient and has remained dynamic.

Long term lease

The long-term rental market is very interesting for owners who want to earn a good income. Demand is much higher than supply, so there is no difficulty in renting a property.

This is due to the demanding conditions for granting credit for bank housing, namely, buyers who want bank financing to acquire a property must have a minimum equity of 20% of the price. This reason, among others, means that many young people have to rent their house before they can save enough to buy the house.

In recent years, Portuguese legislation has been updated in order to increase the rental market, allowing housing leases for a period of 1 year, renewable without any time limit.

The rent value is freely set by the owner and can be updated or increased at the end of each lease period.

In Portugal, usually, the owner wants a guarantee of payment of the rent by the tenant, such as proof of income and security deposit. The tenant is the sole payer of domestic services, eg electricity, water, telephone communications, etc. In general, the long-term rental property does not have any furniture and kitchen equipment.

Short term lease

In short-term rental, the owner leases the property for periods of a few days or weeks, usually for vacation or work reasons of the tenant. Usually, these are properties located in tourist areas, large cities (Lisbon or Porto) or places of cultural interest. The rent amount is freely fixed by the owner.

In this type of lease, the owner wants a higher income, although there is a risk of not being able to rent the property all 365 days of the year.

The owner will have to furnish, decorate and equip the property. The owner must also pay the monthly expenses for domestic services (electricity, water, internet communications, etc).

Property resale

Many owners buy real estate in Portugal, as it is a safe and profitable investment. The Covid-19 pandemic did not shake the real estate market in Portugal.

Real estate investing is often connected with short-term or long-term rentals. That is, the owner buys a property to lease for a while and, when appropriate, sells it with good profitability.

The profitability of the sale of the property, in general, is around 5% per year, in more attractive areas, such as Lisbon, Cascais or Algarve.

The Golden Visa program is important for the Portuguese real estate market compared to other European countries.

Finally, it is important to mention that the investor should seek the best professionals in the market for advice on the best return on the property.