Interest rates for mortgages are relatively low right now, and it’s possible to can earn more than 7% each year if you invest in a property in Portugal. But where to invest, and what are the basic things should you consider.
Choose the city very carefully because there are great differences between the prices, and their future possibilities. Larger places like the cities of Lisbon and Porto and popular areas such as the Algrave make for good investments thanks to their size and being ever-attractive places to live for both foreigners and native Portuguese.
That said, it always makes a lot of sense to buy where you live. Finding tenants and solving any of their problems is much easier the nearer you are.
Some neighbourhoods within the city centre may be more popular than others, although depending on the type of tenants you’re looking for and your budget, there may be more profits to be made in other areas. It’s also worth looking into what the up-and-coming local areas are, to be able to plan for the future.
- It may sound obvious, but try to buy properties below the average market price. Try to do a full market study of the areas you’re thinking about buying in to be sure you don’t pay too much. New constructions are more expensive and may take longer to set up and be ready, so think about buying a used property instead.
- What are the maintenance costs? In older buildings, it’s quite common for expensive repair works to be needed, while newer buildings will have several years’ worth of guarantee for any damage there may be. Also, how many neighbours are there in the building? Depending on this, you will have to share the repair costs between more or less people.
- Similarly, the apartment itself may need renovation work. Investigate how much this will cost before buying because it could set you back a while and harm the profitability of the investment.
- Buying on the Portuguese coast, in the Algarve for example, is always a sure investment. The seaside is always a pull for both national and international tourists, and so buying a property there can be a great long-term investment, and even more so if it’s well communicated with plenty of services close at hand.
- There are, of course, certain taxes and extra costs related with any purchase of a property, whether it’s second-hand or new.