Portugal rental
Looking for a holiday rental home needs a different mindset to purchasing one for your own use

Investing in a holiday rental property is a rather different undertaking than buying a second home. The searching, viewing and purchasing process requires a different mind-set, with a focus on how to maximise income rather than on the purchaser’s personal taste.

“It’s not something that comes naturally to every purchaser,” explains Chris White, Founding Director of boutique real estate agency Ideal Homes Portugal. “Many buyers set out to purchase a holiday home as an investment property, then end up choosing one that they themselves would like to live in. Of course, that’s fine if the plan is for the purchaser to one day move there, but those looking for holiday rentals purely as a means of income generation need to be a little more hard hearted in their outlook.”

To that end, Chris has provided his top five tips for helping buyers to profit from their holiday rental property.


Lock in the location

Firstly, as with everything in the property world, it’s all about location. Holidaymakers want somewhere that is easy to reach from the airport, that has a swimming pool and that is near a beach. In the Algarve, a nearby golf course is also a must. Additionally, local facilities such as shops, restaurants and bars should be close, ideally within walking distance.

The Royal Cabanas Golf apartments in the eastern Algarve are a great example of such a property. Cabanas is the eastern Algarve’s rising star when it comes to hit holiday destinations and these apartments tick all of the location boxes perfectly.

Buy bonus features

Luxury apartments
Sea views and easy access to the beach are bonus features

Once you’ve found a good location, look for the properties that stand out from the crowd due to their bonus features. It could be a hot tub in the garden, a particularly attractive roof terrace or a stunning sea view. Whatever catches your eye will be sure to catch the attention of holidaymakers searching online for the perfect rental property.

There are luxurious off plan apartments in the Porto de Mós area of Lagos which are ideal, featuring wonderful sea views, easy access to the beach and a host of other bonus features, including two pools, a gym and a sauna.

Remember your returns

Think about the kind of yield you need from your rental property and keep that firmly in mind when viewing potential accommodation. The Algarve is a tourist mecca, with some 15.5 million overnight stays from January to October 2014 according to the National Statistics Institute (INE), up 11.2% on the year before.

Even in the most popular areas, two bedroom apartments can be found for as little as €120,000, with three bedrooms from around €130,000, such as a brand new three bedroom property with communal pool and views of Silves Castle, priced at €129,000.

Yields of up to 10% are possible with the right property, making the Algarve an exciting destination for those looking for a holiday rental investment property.

Perfect that paperwork

Every country has its own rules and regulations on rental properties. In Portugal, your income from the property is taxable even if you own and manage it from abroad. You also need to have certain licenses in place before you can legally rent out the accommodation that you have invested in.

Take a test drive

Take a holiday in the home you are going to rent out
Finally, take a holiday in the home you are going to rent out

Perhaps the most enjoyable step in the process! Buyers should test out their new investment for themselves and view it through the eyes of holidaymakers. What are its outstanding features, how close are the best restaurants and what does the kitchen need to be equipped with? Discovering these items will help the buyer to ensure that he/she has relevant information to hand when it comes to promoting the property as a holiday destination and will ensure that those renting it are happy that their every convenience has been catered for, maximising their chances of returning there the following year.

For further details contact Ideal Homes Portugal by visiting: www.idealhomesportugal.com.