What is the Attractiveness of Portuguese Real Estate for Investors: Buying, Renting, Maintaining

Portugal, a country on the Iberian Peninsula, washed by the waters of the Atlantic Ocean, has some of the most attractive European resorts.

To live in this state, or regularly come to vacation in their apartments is a reasonable decision for wealthy people. In addition to the climate, in favor of Portugal say the mentality of the locals (calm, leading a measured way of life - the complete opposite of the neighbors-Spanish!), tolerant attitude to foreigners, low cost of living compared to other EU countries.

If you decide to buy real estate here, as a nice bonus can get a residence permit with the prospect of registration for full citizenship in 5 years.

To do this, you need to buy objects within the framework of participation in the state investment program.

Program options related to the purchase of real estate 

The program of economic investment for obtaining a residence permit for foreigners (so-called "Golden Visa") was launched back in 2012. But in 2015, the Portuguese authorities carried out a significant "upgrade", updating and adding some new items.

 Now the Portuguese residence permit is available to potential investors in 7 variants, including the 2 most popular, related to real estate.

1. Direct financial investments in real estate - from 0.5 million euros. It is possible to purchase not one, but several objects at once, the total value of which must correspond to the specified amount. The investor will be able to sell the purchased property after 5 years.
2. Purchase of real estate from 350 thousand euros, if it was built at least 30 years ago, requires major repairs or reconstruction. It is important that in this amount the investor can lay down not only the immediate cost but also the cost of future repairs! Almost always the list of "applicants for sale" is compiled by the state, and they are objects of cultural and historical heritage.

If such objects in addition are located in sparsely populated, not too-developed regions, you can buy and reconstruct them for 280 thousand euros.

 Together with the investor holder of the residence permit can become a spouse, children under the age of 26 years (if they are dependent on their parents), as well as parents of the applicant, if they are over 65 years old.

How to decide on the region when choosing real estate

Despite the small territory, Portugal is very different, including - in economic terms. It is divided into 7 regions. Let's consider each of them, including from the point of view of real estate market assessment.

Lisbon region.

It consists of part of the districts of Lisbon and Setubal.  The very fact that the region is the capital of Portugal speaks for itself. Business centers, the largest educational institutions, and a variety of places for active recreation attract young people and business people. Mostly real estate is bought for rent. 

The region includes the famous resort of Cascais. Proximity to the capital determines its popularity. There are many attractions and excellent beaches. Housing can be chosen for every taste - from simple apartments to mansions with the author's design.

The high demand forms the high cost of objects in the region. We will talk more about it below.

Northern region.

The largest in terms of population and territory - occupies up to a dozen districts. The main cities: are Porto (the business capital of Portugal), Vila Real, and Bragança. The region is attractive for fans of the rhythm of life in megacities - business and active people. Housing prices are quite high.

Important! 
Buying real estate in the Northern and Lisbon districts in the framework of the investment program will be possible only until 2021. Thus, the authorities are trying to redistribute investment income in remote, economically weaker areas. The law has been adopted but has not yet been published, i.e. it has not entered into force. Time will tell whether the restrictive terms will be revised.

Central region.
The main cities are Coimbra and Leiria. They are not too big - there are no big cities in the region at all - the area is best suited for a quiet, measured life. Ideal for families with children.

Algarve region.

 This includes counties located entirely on the coast of the Atlantic Ocean - a popular vacation spot for tourists. The beaches of the Algarve are called some of the best in the country and even Europe. 

The architectural style and mentality of the inhabitants feel the proximity of North Africa, everywhere there are Moorish sights.

Real estate here is characterized by the phrase "quality for a reasonable price". Even within the county, prices can differ by 50%. 

The main cities are Faro, Tavira, and Lagos.

Alentejo region.

Partly coastal region, in terms of area it is almost a third of the country. There are many beautiful beaches along the coastline. It is said that this is where you can see the "real Portugal". Observance of traditions in everyday life, cuisine, well-preserved historical sights, and classic fishing villages make you forget that we are in the 21st century. 

 Alentejo is traditionally considered a wine-producing region. The main cities are Santaren, Evora, Beja, and Portalegre. Although, compared to Lisbon and Porto, these are "villages" with a population of 25-40 thousand people.

Housing prices in the coastal and central districts of the region differ significantly.

Two Portuguese regions are located on islands. 

Madeira.

One of the most beautiful places on the planet. The diverse vegetation, preserved in its pristine state, gives reason to call the island a non-man-made botanical garden.

The main cities are Camara di Lobus (with a developed network of night entertainment) and Funchal - the capital, business center, and port city.

The island has several free economic zones with preferential taxation for non-residents.

Real estate here will inevitably become more expensive due to the adopted law on the redistribution of investment objects from Lisbon and Porto to remote regions.

Azores Islands.

It is an archipelago of 9 islands, each of which has its peculiarities. Appreciated by tourists from all over the world, many foreigners buy mansions in the region.

The region attracts a comfortable climate, developed infrastructure, and geographical position (it is halfway from Europe to America). The main cities are Eroishmu and Orta.  There are daily flights from Lisbon to the 4 most developed islands. 

Here you can buy villas, apartments, and tourist facilities.

Madeira and the Azores, thanks to their isolation, were less exposed to coronavirus infection than other regions of Portugal. The prospect of a safe "hide" for a while from the pandemic, not going far from Europe, has recently attracted many wealthy people.

Approximate cost of real estate by region

To have a general idea of the real estate market in different regions - we offer to study the data in the table. Here are the figures for the beginning of 2020 (rounded to 10 euros). It should be noted that Portuguese real estate was quite quickly reanimated after the quarantine and is now steadily increasing in value. And Portugal itself is a country that suffered from the coronavirus epidemic much less than its neighbors.

The purpose of investment determines the choice of region

To understand what region to pay attention to - you should decide: do you want to live in Portugal, vacation, or rent?

Renting.

It is very profitable to rent commercial and residential properties in Lisbon and Porto - they are always in demand. As already mentioned - you need to get the deal done before 2021.

Being a landlord of short-term rental properties in the center of these cities is possible only if you have a tax number and a license from Alojamento Local.

Residence permanently.

Normal life is desirable developed infrastructure, and proximity to educational and medical institutions. The Central region is ideal. In particular, the city of Coimbra has the oldest university in Europe. Given the remoteness from the coast - prices on the housing market here are acceptable.
Important! "For themselves" (and not for rent) is still reasonable to buy objects for 500 thousand euros. After all, near buildings of historical value, prohibited, for example, parking, there are no large shopping centers.

Recreation.

Of course, the best option is an apartment on the sea. This could be the Azores, Madeira, or the Algarve resorts.

You can invest in a hotel, renting it for short-term rent to visitors to thermal springs.

What costs incurred by the owner of real estate in Portugal

Invest in the purchase - this is half a job. How profitable it is, will show the level of maintenance costs. The costs include:

• property tax;
• the amount of insurance;
• utility bills.

Municipal tax ranges from 0.3 to 0.8% of the value of the property. It is allowed to be paid in installments.

Accident insurance is not compulsory but is welcome. It costs 200-400 euros per year, depending on the property.

Utilities are set by municipalities and depend on the region.

For example - the maintenance of a one-bedroom apartment in a condominium worth 500 thousand euros (the minimum amount for obtaining a residence permit) will cost - depending on the location - 5200-10,000 euros.

Specialists of our company will provide professional advice on the investment program in Portugal and will help to select suitable objects, using its cooperation with proven Portuguese real estate agencies.

Our lawyers will prepare the necessary package of documents to start the procedure for obtaining a residence permit and solve organizational issues.