The expat community in the Algarve has always been dominated by the British… because the British and the Portuguese have been each other’s greatest allies since the 12th century.
This British presence in this part of the world could diminish now.
If, post-Brexit, the U.K. economy struggles (or, as one British friend who joined us in Portugal for our conference last week put it, if the U.K. economy now tanks), Brits, both British tourists and British expats, may be forced to pull out of the Algarve in big numbers, creating an opportunity for another group to come in and snatch up the properties and the rentals the Brits leave behind.
Another group whose currency, say, is strong against the euro…
Another group like, say, us Americans.
We invest a lot of virtual ink introducing you to interesting retirement lifestyle options in Central America and the Caribbean. Central America and the Caribbean as a region are a first choice among North Americans looking for sunny, friendly, welcoming, and affordable places to reinvent their lives in retirement and, increasingly, even years or decades before that stage.
Portugal (which we name in this year’s Retire Overseas Index as the world’s top retirement haven) offers much of what you get in Central America. It’s got the beaches, the coast, the sunshine, the great weather, the expat community… and it’s even got the same low costs.
In fact, the cost of living in Portugal right now can belower than the cost of living in many Central American and Caribbean destinations we highlight for you. That’s a bold statement that, after spending the past week auditing our theoretical budgeting against on-the-ground spending, I’m more confident in making than ever.
Here’s the difference between life in Portugal and life in Central America or the Caribbean: Life in Portugal is First World.
The infrastructure, the amenities, the culture, the services, and the standards of service… they’re all First World, not developing world.
Portugal is Europe’s unsung star, but the secret is getting out. The first quarter of this year, more than 20% of all property purchases in the country were made by foreign buyers.
Lief and I are sold. We made our first investment in Portugal last year, when we bought a rental apartment in Lagos, a centuries-old harbor city on the country’s Algarve coast.
I write from Lagos today, where Lief, Jackson, and I are enjoying our first family stay in our apartment here and taking this chance to get to know this charming and historic coastal city a little better.
This trip we’re also debating options for where, specifically, to make a second investment in this country. I’m leaning toward Lisbon.
We don’t have plans to live full time in Portugal, but we’d like an excuse to return to this country regularly. A rental property on the Algarve coast coupled with a rental property in cosmopolitan yet genteel Lisbon would give us reasons to travel to both places once or twice a year at least.
We have about four months of rental experience with our Lagos property. It has been nearly fully occupied since within 24 hours of becoming available for rental, and we have bookings that translate to 90%+ occupancy now through September.
Rental managers presenting during last week’s conference walked attendees through different scenarios. You could earn a return of 4% to 5% net per year renting a property just six months a year… meaning you could live in it yourself the other half of the year.
Or rent full time for an annual return of 8% net.
Portugal is the full package… a live and invest overseas destination that checks all the boxes.
More on why tomorrow. Time to step away from my laptop and get outside to enjoy this sunshine-filled Sunday in Lagos.