The number of investors from Europe and overseas that fall for the beauties of the local landscape in Portugal and decide to buy their own residential property in the attractive seaside locations of the Algarve increases every year.
Up to 80 % of investors who buy their own residential property in this area opt for the investment strategy of purchase and lease; in other words, they not only use the property acquired for their own needs, but also lease out the property, bringing them in a regular income while the value of their property rises.
Residential properties in attractive places (for example around Lagos, Quinta da Lago, etc.) guarantee the option of leasing out mainly during high season (around 10-15 weeks), which generally covers all expenses of the owners (including mortgage) given the purchase price of the property.
The factors which an investor must take into consideration when choosing an investment are primarily location, potential lessees, the current price of rent (in high season a villa with 3 bedrooms and pool in an attractive resort on the coast will lease for 1000 – 1500 Euro a week), the realistic occupancy of the property, and the specific mortgage conditions.
The prices of property in Portugal are practically comparable with the prices of property in neighbouring Spain. The majority of investors that buy property in Portugal make use of the option of financing the purchase of Portuguese property through a mortgage, which it is possible to get under favourable conditions from local banks for up to 80 % of the value of the property.
The price of a standard villa by the coast (with 3 bedrooms and pool) ranges from 400 000 to 600 000 Euro. The price rises proportionately with the chosen location. One of the most luxurious locations is the area known as Quinta da Lago, where the price of a luxury villa can rise to several million Euro.
It is possible to buy a standard apartment on the coast with two bedrooms (plus living room plus kitchen) from 130 000 Euro upwards, whilst a rural farmstead in the countryside away from the cities and urban units but with a view of the sea will cost from 300 000 Euro.