Ready-to-move-in furnished houses: a new trend landing in Portugal

A furnished and decorated home, ready to move into, is a way of adding value to a property product, whether you're buying or renting. Investors, developers and mediators, architects and home-stagers are "keeping an eye" on this international trend in Portugal which, for the time being, is very much focused on a niche audience and medium-term rental business models, holiday flats and/or buying and selling homes in the premium and luxury segment. A turnkey project saves time and money due to its many advantages and can make decision-making easier. After all, who is looking for this type of solution in the Portuguese market? And what are the added values? Idealist/news heard from several players in the sector on the subject.  

"The trend of using housing as a service, known as house-as-a-service is becoming more popular in several countries, reflecting a change in consumer behaviour. The preference for minimalism and experience over material possession. This trend is evident in the way digital nomads choose to live - more simply and lightly, valuing practicality over the ownership of material goods," explains Catarina Diniz, Head of Business & Strategy at Staging Factory.

According to her, demand for this type of home has been growing, but it all depends on the public and segment - whether students, digital nomads or professionals in temporary work, more focused on renting (short or medium term), or investors and developers, who invest in furniture and decoration to have a more attractive, "ready-to-sell" product. 

Cristina Duarte, owner of a fully furnished flat to renting the Lapa-Estrela area of Lisbon, confirms that her tenants always value the fact that the house is ready to live in, with everything they need, and are willing to pay a 'plus' in the rent, which makes up for the investment in decoration. "They tend to be foreigners, digital nomads or company executives," he told idealista/news. But there are also young Portuguese interested in this type of product, such as Filipa Reis who, with her boyfriend João, decided to rent a furnished flat when they settled on the outskirts of Porto, allowing them to "save the expense of furnishing a complete house and the hassle of moving to another house in the future, either nearby or in another part of the country," she shares.

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For André Rodrigues da Silva, managing director and architect at Other Fields, wanting to live in a turnkey house, ready to move into overnight, cannot yet be "categorised as a dominant trend". However, he assumes that it is "undeniable that there is a growing demand for this type of offer in the property market, especially in medium-term rental business models and tourist flats". In other words, although it's not a "fully established" trend, the demand for furnished or decorated homes is growing and "influencing the presentation and marketing of properties on the real estate market", gaining expression above all in large urban centres.

Real estate agent Porta da Frente says that buying/renting an already furnished/decorated home has "never been a trend" in its segment so far. "It's unusual for properties to be sold furnished, with the exception of a particular decoration project that is one of the selling points of the house. From our 28 years of experience in the market, a client rarely has the requirement for a furnished house, occasionally falling in love with the decor of the property and making an offer," explains João Cília, CEO of Christie's Front Door, to idealista/news. However, given the existence of several tourism projects that offer this decoration service, he recognises that it is "to be expected" that in these cases "the units will come properly equipped and fully furnished".

Foreigners and nomads are mostly looking for these solutions

The truth is that the market still seems to be moving at different speeds in this area. While in some market segments demand for this type of asset is not yet significant, in others it is already a sine qua non, as is the case with high-end residential. José Cardoso Botelho, CEO of developer Vanguard Properties, confirms that this is a growing line of business in the higher segments, namely premium and luxury. "And even more so when we're talking about foreign, professionally active clients where time is always scarce." According to him, in the market segment in which he operates, the profile of the investor looking for this type of house is "clearly" foreign, "not only because they generally have greater economic and financial capacity, but because they usually don't know the country, it's easier to hire someone who will take care of everything from A to Z".

Catarina Diniz also has no doubts about the profile of investors who are most interested in this type of house. In the case of property investors, temporary professionals or digital nomads, "it's still foreigners". And this type of buyer, because they are not permanently in Portugal, "prefer to buy a house that is already furnished, ready-to-rent or ready-to-inhabit," says the home-stager.

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André Rodrigues da Silva from Other Fields shares the same opinion. He says that at the moment, in the case of rentals, this type of house is mostly sought after by foreigners, "particularly senior executives from multinational companies who come to work in Portugal or Europe and need a home for a period of around one to two years". In addition, "there is still considerable demand, especially for holiday flats".

In the case turnkey tourism projects, Porta da Frente says that it has "practically the same proportion of Portuguese and foreigners closing deals", even as investors. The Portuguese are looking for an "extra income", while Brazilian citizens, from the UK and Germany, for example, are looking for income and, in addition, stays in the country.

Property development increasingly attentive to the "niche"

Vanguard Properties has been investing in this niche for "quite some time". However, José Cardoso Botelho admits that in the sector in general, "something is already being invested, but still in an incipient way, except perhaps in the golden triangle of the Algarve". What's more, the price variation between an empty house VS a house already decorated and ready to move into "can be very significant depending on the type of decoration desired". "In general, according to our experience, the minimum value for decoration is around 1,500 euros per square metre (m2),a nd can be as high as 8,000 euros per m2," says the promoter.

"A few years ago, property developers only invested in the typical model floor that served as a showcase for the entire development. Nowadays, more and more developers are investing in this niche as a way of adding value to their property. A well-furnished and well-decorated house for sale attracts more and better customers and ends up having a higher value. On the other hand, there are developers investing in the sales market with guaranteed returns. In other words, they invest in furniture and decoration so that they have a more attractive product that is ready to rent," explains Catarina Diniz.

According to the founder of Staging Factory, which specialises in this type of intervention, more and more developers are working with staging, design and interior decoration companies to carry out this type of project. "A property developer places great value on saving resources and on the quality of a final result that guarantees the optimisation of the property's space and the maximisation of value and speed of marketing," he says.

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The specialist has been involved in several examples of turnkey projects aimed at fully furnishing and decorating properties for sale and rent. The most recent challenge of this kind she undertook consisted of furnishing and decorating eight flats in Évora for the medium and long-term rental market.

"Most of the projects we develop are turnkey. Property developers, investment funds, hotel groups or foreign investors prefer to work this way. The latter essentially opt for turnkey projects as they are living abroad and want to arrive with the house already furnished, decorated and sometimes fully equipped with crockery and clothes so that it is completely ready to live in or ready to monetise," she stresses.

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Architect André Rodrigues da Silva also said that, in general, there is a tendency to "at the very least" resort to home-staging. In addition, "hybrid products are emerging in which the developer creates a model flat and then offers a turnkey decoration package" for sale to the potential client. We have collaborated with several promoters who follow this approach," he told idealista/news. With regard to the prices of this type of service, for rentals, he says that an increase of between 20 and 30% in the rent can be expected, depending on the category of the property; and in terms of sales, a price increase of between 15 and 20% can be considered.

João Cília, from Porta da Frente, confirms that property developers have been investing in this tourist project market for a long time, from the north to the south of the country. "Especially since 2011, when Portugal has grown exponentially in the tourism sector, this investment space has been created for the big national and international players (creation of hotels, guesthouses, tourist flats, etc). In the regions where we operate, we have tourist developments in Lisbon, Cascais and Alentejo, which offer exactly this turnkey service. As well as being a legal obligation, it's a facilitator for investors who want to monetise their property," she explains.

In 2021, Pedro d'Orey, founding partner of QuartoSala, announced in an interview with idealista/news that he would be launching a new curatorial service precisely along these lines, focused on working in partnership with property developers to decorate the model floors of their developments. The idea for this counselling service was born in the midst of the pandemic, with the aim of improving the visual appearance of projects and the experience of visitors. 

"The great advantage is that we can combine our know-how in the area of interior design projects and our experience in serving this type of high-end client with the need for property developers to adapt their offer to this new reality. We know how customers want to live in their homes and we can bring that knowledge to the development phase. It's a business-generating experience," he explained at the time.

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Regarding the purchase of this type of house for rental or local accommodation, Porta da Frente admits that, in the case of single properties, it doesn't feel this preference is linked to investment opportunities. "In other words, we don't have clients who ask us for a furnished property to put on the long-term rental market, as they generally prefer to decorate to their personal taste or join an external decoration project. In tourist developments, we do have many investors betting on both local accommodation and longer-term rentals," he emphasises.

"There is very little investment in Portugal in the purchase of rental housing, and in the case of local accommodation there will only be decorated and furnished units. For traditional long-term rentals, it may not make sense to invest in decoration, as the tenant usually has their own furniture," adds José Cardoso Botelho.

Designing a house with design and decoration in mind? Yes

For the architect of Other Fields, in the initial design and planning phase of houses, a holistic approach is increasingly fundamental. "It's even possible to start with the conception of a lifestyle idea, create an interior moodboard and, from there, approach architecture, reversing the conventional process to some extent. This approach is particularly relevant when collaborating with property developers who have robust marketing teams and aim to offer distinctive and attractive products to a specific target audience, eager for a well-defined lifestyle," he explains.

"All the elements that make up this experience must be considered from the outset and interconnected in a synergistic way. This means that design and decoration must be seen in conjunction with other important aspects such as functionality, energy efficiency, sustainability, integrated technology and the well-being of the inhabitants. The choice of wallpaper can be just as important as the choice of air conditioning system in ensuring a comfortable and aesthetically pleasing experience," he adds.

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Projects with multidisciplinary teams are therefore increasingly common. José Cardoso Botelho says that at Vanguard Properties the development of a property project involves 12 phases. "Once the metrics and segments for a given project have been defined, the architecture, engineering, lifestyle and concept teams start to get involved in phase two," he says. Houses are therefore being designed more and more from the point of view of how the design and decoration will look, and he believes that this will become more and more of a trend "among professional colleagues".

This reality is confirmed by Porta da Frente. According to the broker, one of the main developments in the property market over the last decade "has been precisely the creation of multidisciplinary teams in each project that enters the market". "For both tourism and permanent residence projects, there are teams made up of various areas of expertise - including property brokerage - that contribute to creating an attractive, quality product," the company points out.

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Catarina Diniz points out that furnished and decorated houses "attract more potential clients and more and better offers to buy or rent". "Most people find it difficult to visualise the potential of an empty space. Empty houses seem smaller, colder and without personality. On the other hand, a furnished house is more attractive and inviting, allowing the potential buyer or tenant to see how the space can be lived in and make them feel at home. On the other hand, the buyer or tenant may prefer to buy or rent a house that is ready to move into, avoiding the expense and extra work involved," summarises the home staging specialist.

"In a premium and luxury segment, it's another differentiating factor, increasing the product's liquidity. In other words, anything that makes the product more distinctive helps with sales or rentals," confirms the CEO of property developer Vanguard Properties.

The added value of a ready-to-move-in house

When it comes to selling or renting a property, the first impression is crucial, and for this it's important to ensure a perfect balance between aesthetics. "The house has to win the client over at first glance, look functional and allow good circulation. Creating an inviting and cosy environment that appeals to most potential buyers or tenants is therefore fundamental. To do this, you need to use neutral colours and simply designed pieces of furniture. This approach creates an elegant and contemporary environment that appeals to a wide range of tastes. Light colours visually enlarge the space and enhance the beauty of natural light," explains Catarina Diniz.

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For the home stager, it's also essential to include the essential pieces that everyone needs, such as comfortable beds, bedside tables, dining tables, chairs, TV furniture and sofas. "These pieces guarantee the functional basis of the space, allowing future residents to visualise how they can live and enjoy the space. It's important not to personalise or overload the space, allowing everyone to adapt it in their own way," she says.

According to the founder of Staging Factory, the great advantage of a turnkey project is convenience and savings: "time, money and hassle". The expert presents eight major advantages of ready-to-move-in houses:

1. Convenience: the project is delivered completely ready, which means the client doesn't have to worry about managing the different players in the process.
2. Saving time: as the project is managed centrally, the client saves time by not having to deal with unforeseen events or execution difficulties.
3. Risk reduction: the supplier takes responsibility for all stages of the project, including resolving problems and guaranteeing the end result as agreed.
4. Controlled budget: the client receives a closed budget for the entire project, which guarantees cost control and avoids surprises with additional costs.
5. Guaranteed quality: the turnkey service provider usually has experience and expertise in similar projects, which guarantees higher quality and professionalism.
6. Single responsibility: the client has a single point of contact for all project-related issues, facilitating communication and problem-solving.
7. Ready to use: the client can start using the project immediately after completion, without the need for additional adjustments.
8. Stress reduction: by transferring responsibility to the supplier, the client significantly reduces the stress and workload associated with project management.