Portugal

Rental Income in Portugal

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Rental yields on both Lisbon District houses and apartments are good.

November 30, 2017

Last Updated: Nov. 30, 2017
Lisboa District COST (€) YIELD (p.a.) PRICE/SQ.M. (€)
TO BUY MONTHLY RENT TO BUY MONTHLY RENT
Cascais apartments 334,183 1,878 6.74% 3,125 16.96
Lisboa apartments 347,507 1,578 5.45% 3,830 15.10
Oeiras apartments 251,390 1,126 5.37% 2,383 11.53
Lisboa District
Cascais houses 516,546 2,551 5.93% 2,742 11.60
Lisboa houses 397,376 1,797 5.43% 2,937 15.72
Oeiras houses 413,057 2,117 6.15% 2,092 13.19
Faro District apartments 173,250 651 4.51% 1,875 6.54
Porto District
apartments 164,807 918 6.68% 1,422 8.30
houses 277,402 1,381 5.97% 1,135 5.66
Setubal District
apartments 119,253 547 5.50% 1,232 6.24
houses 265,163 1,200 5.43% 1,346 6.70
All yields are gross - i.e., before taxes, repair costs, ground rents, estate agents fees, and any other costs. Net yields (what you'll really earn) are typically around 1.5% to 2% lower.
Source: CasaSapo Definitions: Data FAQ See also: Update Schedule

Lisbon's property market is now reasonably priced. Comparatively speaking, Lisbon housing prices are among Europe's lowest:

  • an 85 square metres (sq. m.) Lisbon apartment in an elite area may cost around EUR 200,000 to buy.
  • a 120 sq. m. Lisbon apartment may cost around EUR 300,000 to buy.
  • a 250 sq m. Lisbon apartment may cost around EUR 840,000

How much will you earn? Apartment yields in Lisbon District range from 4.5% to 6.7%, with smaller apartments earning proportionately more. These are good yields and the purchase price is attractive for a European capital city, though Lisbon is hardly at the centre of things. Villas in Lisbon have similar gross rental yields.

Cascais apartments can generate excellent returns at 6.7%, while houses in Oeiras can generate surprisingly good returns at 6.15%

In Faro, Algarve, a 120 sq. m. apartment costs on average EUR 1,870 per sq. m., or EUR 215,000. Apartments in Faro return rental yields of around 4.5%.

Our rental yields figures assume long-term lets; short-term rentals may earn higher returns.

Conclusion: after many years on the back-burner, Lisbon is looking good. Tourist interest in the centre of Lisbon is enormous, so the option of letting via Airbnb is there for much of the year. Lisbon's rental yields are comparatively among the highest in Europe, and Lisbon's price to rent ratios are among Europe's lowest.

Round trip transaction costs can be high in Portugal. See our property transaction costs analysis for Portugal and Property transaction costs in Portugal, compared to the rest of Europe.

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