Whether you are a landlord looking to invest in property in the Algarve or a tenant seeking out a new home in the sunshine it’s important you know your stuff when it comes to the rental market in Portugal. Here’s everything you need to know, broken down into landlords and tenants.

For landlords

• Most rental properties are taken on only on a short term basis.
• Average yields on apartments in Lisbon range from 5.4% to 6.2%.
• Tenants expect the property to come furnished – this means beds, mattresses, sofas and white goods.
• There will be taxes to pay in both the UK and Portugal when renting out a property, therefore it’s important you keep all your papers in order. Rental tax in Portugal is charged at a flat rate of 15%.
• There is also property tax to consider, and each individual municipal has its own rate.
• You can ask for a deposit up front from tenants to secure the agreement between parties and rent is usually paid a month in advance.

For tenants

• Many people advise renting a holiday villa or apartment for a couple of weeks before taking on a property in the Portuguese rental market, this is because you should never take on a rental property unseen.
• Most properties come furnished and you can expect to pay around EUR 900 – 1,200 in Lisbon for a two bed property.
• Rental costs for short term agreements usually include utility bills as well – this means electricity, water and gas are all covered and can be used without any worry about surprise bills.
• Rent is usually paid a month in advance in Portugal.
• Choose a reputable company to find a property and take out a rental agreement with – click here to discover one such example.
• Apartments are popular rental properties. You may find it hard to find a villa or townhouse that you can rent – this is because the owners don’t mind them remaining empty in the off peak seasons because they charge huge amounts during the summer to holiday makers and part time renters.

Whether you are a landlord or a prospective tenant it’s important you seek out reputable legal advice, perhaps invest in a translator if you are unsure of the language and have all paperwork in order before signing anything.

Bear in mind that your life in the UK won’t necessarily be on hold, you may still have to pay taxes for both countries (especially if you have income in both). Renting abroad is a great way of enjoying a slice of the good life without the overall commitment, just be sure to check carefully you are happy with the situation before signing on the dotted line.

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