Finding a rental in Portugal: difficulties, prices, regulations, searches

April 12, 2018

Moving to Portugal is what many of you would like to do, and one of the factors influencing your decision to settle in will be whether or not you can find your new home. In the press, on the internet, at the bistro counter… when we talk about real estate in Portugal today, we very often refer to buying property. However, for people wishing to settle in for a short or fixed period, or who want to “give it a try” before settling permanently in Portugal, renting is often the preferred option. So what about renting in Portugal? Is it that easy to find one?

Renting in Portugal: not so easy to find!

Like the real estate market for purchases, the rental market in Portugal is currently very dynamic. Demand outstrips supply, and bargains are quickly snapped up. So you need to be reactive, and plan well in advance, especially in the most dynamic regions in terms of real estate: Lisbon and its suburbs, Porto and the Algarve. Let’s take a look at why the rental market is so complicated.

Typical Portuguese building.

1. Numerous seasonal rentals

It’s no secret that Portugal has been experiencing a tourism boom in recent years ( 65% since 2013). This beautiful Iberian destination is being promoted in the world’s media, arousing strong interest among travelers looking for new destinations to explore.

Faced with this explosion in tourism, some regions of Portugal are experiencing a shortage of “long-term” rental accommodation. Indeed, many buildings are being refurbished, not with the aim of creating housing for Portugal’s residents, but as a response to the development of tourism. As a result, hotels, hostels and apartments are being built for seasonal rental, rather than for long-term rental. Landlords prefer this type of “short-term” rental, which has been more profitable until now, even though it is becoming increasingly regulated in Portugal. If you’d like to find out more about seasonal rentals, please read my article on the subject .

2. Many buildings still under renovation

Portugal is a popular destination for tourists, but it’s not the only one: there are also many “foreigners” who want to settle and live here. Portugal was not necessarily expecting such a high demand for real estate, and many buildings are not yet “ready”.

In fact, you only have to walk around Portugal to see buildings undergoing renovation and others that are uninhabitable for the time being due to a lack of resources in the past to maintain them. Although opinions are divided on the effects of tourism and the intensive influx of foreigners to Portugal, this has nonetheless led to a transformation of the building stock through intensive renovation.

So, once the renovation of these buildings is complete, new housing will appear. As mentioned above, some of these will probably be for tourist use, but we can imagine that others will be for rental purposes.

Lisbon rooftops, the Santa Justa elevator, the Convento do Carmo and the crane, symbol of Lisbon’s renovations.

3. Landlords increasingly demanding in their choice of tenants

Two years ago, landlords who rented out their properties required almost no guarantees from their future tenants, but now the reality is quite different.

Landlords who rent out their property on a long-term basis are faced with a large number of applicants when their rental offer is published. Faced with this high demand, landlords have become more demanding, and are more selective in their choice of tenants. You need to be aware that your profile will be studied, and that the landlord will probably give preference to the applicant who offers the most guarantees.

Among the most frequently requested guarantees are whether or not you have a “fiador”(guarantor) resident in the country, whether or not you can provide a work contract, the duration of your work contract, etc

As an expatriate, when you arrive in Portugal, you won’t necessarily be able to provide these guarantees. In this case, landlords often ask “foreigners” who can’t provide these documents to pay an advance of three months’ rent in addition to the three months’ rent required when signing the contract. This makes a total of six months’ rent in advance to be paid to the landlord.

Building facades in Porto

4. The Portuguese are strongly attached to home ownership rather than renting

In Portugal, selling is much more widespread than renting. It’s a way of life. To give you an idea, in 2015, 60% of the French were homeowners, compared with 75% of the Portuguese. This phenomenon may be linked to the fact that, prior to 2012, rental regulations were unfavorable to landlords. As a result, there were few properties available for rent. After this date, the introduction of the “Nova lei do arrendamento urbano” (the new urban rental law) eased the constraints on property rental. Landlords were granted the right to repossess their property more easily in the event of non-payment, and also to negotiate rents more freely. Despite this new law, the Portuguese continue to buy rather than rent.

Lastly, this preference for buying/selling rather than renting may also be linked to the fact that, in Portugal, the amount of a loan is almost the same as that of a rent, so buying is still favored over renting.

View of Lisbon, Rossio Square.

Rental prices in Portugal

It’s time to talk about rental prices in Portugal. I could give you prices per square meter, as we often see, but that wouldn’t really reflect the market, given that many factors can make prices fluctuate by as much as a factor of two.

In fact, the condition of the property, its standing, whether it’s equipped or not, the surface area, the view, the presence of an outside area, a parking lot, an elevator, heating, air conditioning, nearby amenities and, of course, the location… are all factors that influence the price.

To best reflect the current rental market, here are a few concrete examples. Here are four apartments and their rents.

4 rental apartment ads, in so-called “attractive” regions, all renovated, two-bedroom, with reversible air-conditioning.

Rental regulations in Portugal

1. Payments to be made as a tenant

To rent a property in Portugal, you’ll need to pay three rental payments in advance. The contract will be drawn up in triplicate, one for the landlord, one for you and one for the tax authorities. To rent, you will of course need the famous NIF(numero contribuente), which we mentioned in a previous blog post.

You pay your rent on the date agreed with the landlord. In Portugal, payment is often made at the beginning of the month for the following month (example: payment on January 5 for February rent). Once you’ve paid your rent, your landlord will issue you with a monthly receipt.

As for utilities(water, electricity, gas, etc.), the rules vary from one landlord to another:

energy contracts remain in the landlord’s name, and the landlord pays them
energy contracts remain in the name of the landlord, who sends you a copy of the bills each month for payment
energy contracts are put in your name and you pay them

In Portugal, housing and property taxes, known as “IMI”(Imposte Municipal sobre Imóveis), are paid by the owner of the property. The same applies to condominium fees.

Finally, it’s optional, but we recommend that you take out home insurance to avoid any problems during your stay.

Sea view.

2. Duration of rental contract

In Portugal, the minimum length of a rental contract is six months, but landlords generally ask for “renewable” one-year contracts. Less than a year represents too much “turnover” for them, and is of little interest to them, and more than a year doesn’t give them enough freedom should they wish to sell their property or increase their rent after a year’s rental.

3. Rental contracts in Portugal

The contract must be drawn up in triplicate. It is recommended that you contact a French-speaking lawyer in Portugal to check that everything is in order, to see the clauses and that you can benefit from a bilingual contract, but this is not an obligation. In particular, the contract should specify :

the identity of the landlord and tenant,
the condition of the property at the time of rental (please note that in Portugal, an inventory of fixtures is not systematically required, but is obviously recommended. If you fail to do so, the property is presumed to be in good condition. ),
the duration of the rental (start and end dates),
the rental price,
whether or not utilities are included,
payment terms(bank transfer, cash),
how the tenant and landlord can terminate the contract.

Rental contract

How can I find a rental?

Before determining how to find a rental, it’s important to have a clear idea of what you’re looking for:

Which neighborhoods or areas are most interesting to you?
Are they close to your children’s schools or your workplace?
Is there public transport nearby, or parking spaces?
Is a shared flat an option?

Here’s a non-exhaustive table of options to get you started on your rental property search. Please note that some of these options will require a command of Portuguese or English.

recherche llocation au Portugal

I’d also like to take this opportunity to remind you that when looking for a rental, a Portuguese T1 is not the same as a French T1. In Portugal, the number corresponds to the number of bedrooms, whereas in France it corresponds to the number of rooms. So, while a T2 in Portugal has two bedrooms, a T2 in France has only one.

So, if you don’t speak the language or understand the regulations, I recommend that you take someone with you, if possible, to avoid potential “scams” and other problems. It’s not uncommon to come up against landlords who will offer you rentals without a contract, or contracts that have not been declared and therefore have no receipt. In this case, you’ll have no recourse in the event of problems with the property. What’s more, for those wishing to benefit from RNH status, if the contract is not declared, you won’t be able to enjoy the advantages of this status.

In conclusion

In conclusion, renting is one of the options to consider when moving to Portugal. In fact, it’s often the number 1 option you consider when moving abroad. However, as you’ve seen in this article, it’s not always easy to find a rental property in Portugal, especially in the most touristy regions.

How about you? Would yourather buy or rent in Portugal?

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