movetoportugal.com Real Estate Property in Portugal


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Why Property?

Why Invest in Property?

Widely regarded as one of the safest types of investment
Property prices have consistently risen for the past 25 years
In many cases property has yielded far greater profit than bonds or long term fixed interest securities
Borrowing costs are at their lowest levels in 50 years

Why Invest in The Algarve?

Excellent return on investment potential
Highly desirable location
Over 300 sunshine-filled days each year on average
Glorious sandy beaches
The finest golf experience in Europe

Property Investment Simulation

The tables below give an indication of typical property investment scenarios. Quantities are subject to change and depend upon a number of variables such as property condition and location, personal status and market conditions.

Typical Property Prices & Mortgage Repayments

Property Type	Average Purchase Price		Typical Deposit (30%)		Loan Amount		Monthly repayments (interest only)		Monthly Repayments (Int. & repayment)
Property Type	£	€	£	€	£	€	£	€	£	€
T2 Apartment	100,000	145,000	30,000	43,500	70,000	101,500	292	423	453	657
T2 Townhouse	150,000	217,500	45,000	65,250	105,000	152,250	438	634	680	985
T3 Villa (with Pool)	200,000	290,000	60,000	87,000	140,000	203,000	583	846	906	1,314
T4 Villa (with Pool)	300,000	435,000	90,000	130,500	210,000	304,500	875	1,269	1,359	1,971

Rental Income

Rental income in The Algarve is seasonal. Therefore rent charged outside the summer peak period is usually discounted. The figures below are based on an average 25 week rental period.

Property Type	Rental Income (per week)		Rental Income (per annum)
Property Type	£	€	£	€
T2 Apartment	400	580	10,000	14,500
T2 Townhouse	650	943	16,250	23,563
T3 Villa (with Pool)	900	1,305	22,500	32.625
T4 Villa (with Pool)	1,400	2,030	35,000	50,750

Annualised Return on Investment (based on an Interest Only Mortgage)

Property Type	Rental Income		Monthly Repayments (interest only)		Return on Investment		Net Return on Investment	Gross Return on Investment
Property Type	£	€	£	€	£	€	%	%
T2 Apartment	10,000	14,500	3,500	5,075	6,500	9,425	6%	10%
T2 Townhouse	16,250	23,563	5,250	7,613	11,000	15,950	7%	11%
T3 Villa (with Pool)	22,500	32,625	7,000	10,150	15,500	22,475	8%	11%
T4 Villa (with Pool)	35,000	50,750	10,500	15,225	24,500	35,525	8%	12%

Annualised Return on Investment (based on a Repayment Mortgage)

Property Type	Rental Income		Monthly Repayments (interest only)		Return on Investment		Net Return on Investment	Gross Return on Investment
Property Type	£	€	£	€	£	€	%	%
T2 Apartment	10,000	14,500	5,437	7,884	4,563	6,616	5%	10%
T2 Townhouse	16,250	23,563	8,156	11,826	8,094	11,737	5%	11%
T3 Villa (with Pool)	22,500	32,625	10,874	15,768	11,626	16,857	6%	11%
T4 Villa (with Pool)	35,000	50,750	16,311	23,651	18,689	27,099	6%	12%

Capital Growth

Any return on investment from property should be viewed as long term, ie. minimum 10 years. Those who have invested in property based in the Algarve over the last 2 decades have been rewarded with capital growth in excess of 100% per decade (see table below).

	Property Value
	£	€
Year 1 (Purchase Price)	100,000	145,000
Year 10	200,000	290,000
Year 20	400,000	580,000

On average this equates to an annual capital growth rate of 10%. Although historic data cannot be used as a reliable indicator of future performance, it is widely recognised that this level of growth is sustainable.

Overall Return on Investment

The capital growth figures above, in conjunction with the rental income demonstrate that an overall return on investment of at least 20% per annum is achievable. (This is based on a long term investment approach, see illustration below):

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