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Portugal Among the Best Countries in Europe for Buy-to-Let Investments

29 October 2017

Portugal is among the best countries in Europe for buy-to-let investments and is currently one of the best real estate markets for investors looking for deals on the old continent.

According to TheMoveChannel, the leading independent international real estate website, Portugal is the second most sought-after country on the portal but has the ninth highest returns on rental income on the European continent (5.64%). With the returns surpassing those of Spain and France, it is currently one of the best markets for people looking to invest in Europe.

The expression buy-to-let is becoming more widely known, especially in Lisbon, where many investors are buying apartments and buildings and putting them on the rental market, especially considering the boom in local tourist accommodations.

According to the study, based on the latest official Eurostat numbers, Switzerland has the most significant number of homes in the rental market in Europe, with almost six out of ten properties occupied by tenants. Germany has the second highest number, followed by Austria and Turkey.

Tenants also account for a large part of the population in the United Kingdom. The British government, however, has introduced recent measures to discourage buy-to-let investments, including the removal of tax deductions for mortgage interest payments and a 3% stamp duty surcharge on purchases of properties in addition to one’s primary residence.

The highest rental yields in Europe can be found in Moldova, according to the Global Property Guide, where property owners can expect returns of 10%. Ukraine is not far behind at 9.09%, followed by Montenegro (7.53%), Ireland (7.18%) and Hungary (6.42%).

Croatia and Romania rank among the top countries in Europe regarding rental yields, but less than 10% of homes are on the rental market in those two countries, leaving homeowners with few choices.

Spain has seen a boom in interest in buy-to-let investments, in fact, it is the most popular destination in Europe on TheMoveChannel.com. Overall, the average rental yield in Spain is 4.7%, according to the Global Property Guide.

France ranks as the third most popular destination in Europe for buy-to-let investments, and Italy, the fourth.

Turkey and Greece, however, are emerging as favourites for 2017, generating the fifth and sixth most searches on TheMoveChannel.com.

Dan Johnson, director of TheMoveChannel.com, suggests looking at the following when thinking of entering this property market: “When you’re looking to invest successfully in buy-to-let, location is always the most important factor to consider: is the property in a popular hotspot or a busy city? Do the local inhabitants prefer to rent or buy? Will rental yields be high enough to make the investment worthwhile?”

Original Story: Diário Imobiliário

Translation: Richard Turner