Tourism is performing well in Portugal at present with total overnight guests increasing by 8% to 17.4 million in 2015 according to Portugal's Institute of National Statistics. The UK saw a 16.7% increase in visitors taking their total to 22.2% last year. This spells good news for property owners looking to let their homes in the sun out to holiday makers and secure a solid rental return in return.
Indeed according to Global Property Guide data from the end of 2015, average rental yields across Portugal stand at a strong 6.1% ranking the Iberian national 7th out of 35 countries worldwide with yields the greatest in the Capital Lisbon. Their figures also confirm that apartments are currently showing greater yield increases over houses or villas.
One holiday home owner who is already reaping the benefits of a booming rental market in the Algarve is Clive Edmonds from the Forest of Dean. Clive bought a two bedroom apartment in Lagos, Portugal for €168,000 four years ago with a 100% mortgage. Clive was able to purchase the property at below market value and was looking for a long term investment for additional pension income and somewhere they could use for holidays.
Hot off the heels of a positive 2015, 2016 is looking to be a bumper year for the Edmonds as they have already secured 40 weeks' worth of bookings for their apartment. Lagos is a town in southern Portugal's Algarve region. It is known for its walled old town, cliffs and Atlantic beaches. Just over an hour from airport in Portugal, this pretty town has taken off as an affordable chic destination in the sun as savvy holiday makers looking for somewhere more affordable than the busy Golden Triangle* area and are heading for lesser known towns.
Clive explains why he chose this particular location,
"The Algarve in my perception is a high-quality desirable holiday location. The climate is good, there is lots of sunshine even outside of the summer months, the Portuguese are very friendly and eating out is never that expensive.
"The development known as Quinta Da Abrotea, caught our eye immediately. It was brand new, the swimming pool and gardens were attractive, and the build quality was very high. On top of that the size of the apartment and the huge sun terrace convinced me I wanted to buy it."
Edmonds used local boutique agency Ideal Homes Portugal for the transaction. He had no experience of buying overseas before but as an accountant by profession, he was confident in his ability to project outgoings vs rental income.
"Ideal Homes were excellent and clearly had well-developed contacts in the Algarve and a team of highly professional staff. At no time were we put under any pressure during our inspection trip which is undoubtedly why we felt confident in proceeding."
He offers some advice to people considering buying a home in the Algarve,
"If you're planning on renting your property out, consider where you are buying and is it what holiday makers will want. I would also recommend not to scrimp on furnishings, buy the best you can for the purpose required within reason."
Chris White, Founder of Ideal Homes Portugal responds:
"It makes our job worth while when I talk to clients such as Clive. Customers that have taken our advice and are delighted with the outcome are exactly what we aim to accomplish. Tourism in Portugal is flying and we are expecting many of our rental properties to have a bumper year. Holiday makers that had pursued more 'exotic' climes such as Egypt and Tunisia are returning in their droves to safe havens such as the Algarve.
"Mr Edmonds is a shrewd businessman, with our help he has secured a well priced apartment in a well built development which has superb facilities. It is close to a number of beautiful beaches, has a terrific choice of restaurants and the airport is only an hour away. Portugal has great flight connections year round to many international airports including the UK. This is exactly what holiday makers are looking for and exactly why we are looking forward to a busy but successful 2016."
An example of a similar apartments to the one that Clive Edmonds purchased:
Impressive two bed luxury apartments with sea views, Lagos From €260,000
Porto de Mos Beach Apartments now for sale, built by a long established construction company, here in the Algarve. Past apartments have proven to be an exceptional and in demand choice for buyers.
These new apartments are situated close to the beach and offer wonderful sea views.
• Two Swimming Pools
• Gymnasium
• Sauna
• Air Conditioning
• Central Vacuum System
• Equipped Kitchen: Extractor, Oven, Fridge Freezer, Ceramic Hob, Dishwasher
• Solar Boiler for Hot Water
• Washing Machine
• Thermal and Acoustic Insulated
• Luxury Finish
• Parking & Storage
• Landscape Gardens
Lagos is a vibrant town full of historical interest. Praça de Gil Eanes, the square in the middle of the town, is often the setting for evening entertainment throughout the year. On Saturday mornings a market comes to the square with fresh fruits and vegetables, olives, honey, figs, almonds and local delicacies.
The beaches around Lagos are some of the most beautiful of the Algarve and can be reached in a 25 minutes walk from the centre of the town. However the local beach at Ponta da Piedade is a sheltered bay and has caves, rocks and wonderfully transparent waters - perfect for a day in the sun.
For more information on buying a property for rental income contact Ideal Homes: 0800 133 7644, +351 289 513 434, or www.idealhomesportugal.com, email sales@idealhomesportugal.com
* The Golden Triangle refers to an area in central Algarve between Quinta do Lago, Almancil and Quarteira is often encompassing Vale De Lobo, Vilamora and Quinta da Lago.
