vikula25

Hi, a new member here. I am looking to invest into a property or two in the Algarve for rental income. Is there anyone on this forum doing just that? If I understand it is buyer's market in Portugal right now, but what is the rental market like? Would you recommend to let privately through Homeaway or similar or through an agent? Also do you have any experience of working through management companies who let your property for 4 months a year at 4% yield? An agent told me I can expect 8-10 month occupancy in an Apartment in Clube Albufeira. Does that some plausible? Thanks for your thoughts and advice. Victoria

hottoddy

Down with capitalism only joking.Well there are a few landlords on this here forum for sure i kinda dabble.Not through agents as i don`t like those noisy tourist.Albufeira good choice realistically 8-10 occupancy i think you would have to work at it as well and not just relying on agents

liveaboard

Don't believe anything.
It could be that someone once rented out their apartment for 10 out of 12 months. Or not.
Some people do well at this, many don't. It's just like any other business, competitive and full of details that can make or beak you.
When I did short term rentals in Amsterdam, 30 weeks was the best I did and I was totally thrilled. 25 was normal.
20 was a disaster.
The spread between great profit and none at all is pretty slim.

Check twice, check fifty times before you invest your money. See it, smell it, ask the neighbors, ask a lawyer who is independent of the seller or agent.
Ask your agent for a list of his properties. Check the booking site he uses and see when they're available.
If there are only 8 weeks free this year on most of his properties, let me know.
I'll invest too!

hottoddy

Why dose everyone else seems to have spare money to invest.? When i always need to freewheel down hills in my car just to save petrol.Its an unjust World

liveaboard

To be honest, I don't; I was just trying to sound clever.
I hope you feel better now.

EMR

We used to own an apartment on Club Albufeira.
You will achieve nothing like 10 month ocvupancy,
For a 2 bed in high summer expect to gross around 700pound week in winter if you are prepared to take the bookings 150 week but you will be competing for a limited market.
It is no longer a buyers market with prices rising by over 10% in the last two years.
Club Albufeira is probably the better prospects for owner renters as it is usually full for high season.
For us rental was not the priority because we used it 8 weeks year.
We didca lot of the work .ourselves, if you do not intend comkng to the Algarve you will need to pay someone.
For any property you will need to add the Condominium charges, utilities, rates, cleaning , laundry and finally of course tax.. Expect this to be at least 4-5000 euros year. Condo on Club Albufeira is 1700 euros annum, not one of the highest for resorts of that type.
Buy because the Algarve is somewhere you want to be for your holidays with rental income almost as bonus.
Remember guests now expect a higher standard , aircon, wifi, sat TV are almost a minimum..

vikula25

Interesting! We are not completely sold on the Algarve yet as it seems quite expensive to buy (indirect costs). We have an apartment in Nice and we spent good 7 years using it just for our own pleasure. Now the circumstances are changing and we can't afford this expensive toy as it costs too much to run so we are contemplating going to Portugal where property is a lot cheaper and we could use It as a base some of the time while generating some income to at least cover the costs OR just repatriate the money and buy a property to let closer to home. I am starting to lean towards the latter although it is lovely to have a retreat by the sea.

hottoddy

Good i am so glad you are poor too.Because i don`t like being the odd one out

MrBife

For a year round income you have to buy in a 'year round' location like Lisbon or look at property investments close to universities that provide student accommodation.

Rental season in the Algarve, for most people, is around 10 weeks. During that time you may earn enough to cover running costs but the place will be empty for around 40 weeks less any time you use it personally.

The jury is still out on capital growth throughout the whole Portuguese property sector, if this creeps back then the investment becomes useful. If you can observe capital growth in a market nearer to home then invest there and use the money to come on holiday to the Algarve or elsewhere in Portugal.

macliam

A sensible post. The issue is whether a continuous income stream or high rental is required - the possibility of both is very limited.

For a continuous income stream you need to appeal to the "native" market and look to medium to long-term rental. For high rental income, you need somewhere exceptional where you can charge and eye-watering weekly rate for a few short weeks in the summer. To achieve both, you need to be in an area where there is a requirement for low-season medium term rental, so you are free to operate during the peak period. Good luck with that one.......

liveaboard

The tax regime for residential rental property makes it unattractive for the small investor.
23% flat; no credits or personal deductions.
Even expenses are tricky; I'm waiting to hear about that.

vikula25

I am being offered at least 4 months rental at 4% yield by a management company. That's about 18 weeks. I am told winter months can be filled with golfers and Club Albufeira is not far from golf and sea. However I will err on the side of caution. Thank you.

hottoddy

The true king of landlords
enjoy

EMR

Is the management company paying the condo fees, the rates, all the utilities, not just cleaning and laundry.
What about your personal tax ,liability.
The Club is virtually empty from mid Nov until March as is most tourist accomodation in the Algarve.
I suggest you visit in Feb which is peak golf season and see just how busy Albufeira and the resorts are.
Golfers tend to stay at thr Golf hotels where they get the golf packages.
You do not get many golfers on the Club or similar unless cheap Golf is included.
EG Pestana offers unlimited golf if you stay on their resorts.



If you really are getting 4% nett ,and I mean nett then that is better than the banks but do your homework and not believe all the agent is telling you..

vikula25

Well, I guess asking for your advice here I am doing the homework. I guess my costs would be well covered but there won't be much profit to speak of. Perhaps better to bring it closer to home for residential letting. Owning a place in the sun that's not your main residence is a pain. This is speaking from experience (in France) and I could do without it. Thanks for your insight.