In July 2015 I began paying close attention to the property markets in Portugal.
That was when my local contacts got in touch to say that real estate values in this country had bottomed out and begun to turn the corner after more than six years way down in the dumps.
Values were beginning to appreciate.
I’d been watching this market for some time leading up to this moment. Kathleen and I knew we wanted to take a position in Portugal. For us, it was an A-list market—underpriced and overlooked but with intrinsic value…
Plus a place where we personally wanted to be able to spend time long term.
When we identify a market that meets both our priority agendas—to make money while having fun—we pay attention.
So, back in 2015, we were watching… waiting for the right time to pull the trigger in Portugal.
Then, in July that year, we got serious.
We were focused on the Algarve because of its proven rental track record.
Prices were good across the region in general, but the apartment I identified for purchase with the help of a local contact (in the historic and coastal town of Lagos) was an extraordinary bargain.
The seller needed out. She had a mortgage she wanted to get out from under.
In the year-and-a-half since I closed on the deal, the property has been available for short-term rental. We’ve earned 6% per year on average from rental income… and have had use of the property a few times ourselves, including for a vacation visit with our son last summer.
Meantime, values in Lagos have appreciated at least 15% on average. I bought below market and estimate that my apartment is today easily worth at least 25% more than I paid for it.
I don’t tell you about my personal experience profiting from Portugal’s property market over the past 18 months to make you feel bad.
I share my story to inspire you (I hope) to take action yourself.
The window to get in has not closed… but I believe that this year could be our last chance at the best deals.
A bargain like the one I found is tougher to find today but not impossible if you do some deep groundwork.
I believe that, in key markets across Portugal, you could buy today with the realistic expectation of further steady appreciation both near and longer term… plus rental cash flow of 5% to 8% net per year.
The U.S. dollar stands today versus the euro more or less where it was this time last year, meaning the window for Americans to buy into this market at a strong rate of exchange continues.
However, again, I see this window closing. We dollar holders are rich in euroland right now… but this will not last forever. Indeed, I believe we have already turned this corner, too.
I appreciated my contacts on the ground getting in touch to alert me to the opportunity to buy into Portugal in July 2015.
Consider this your alert.
In addition to the Algarve, I like Lisbon for a renovation project.
Lief Simon
