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Finding a Place to Live – Part Two
The Housing Situation in Portugal
Welcome! I’m Carol A. Wilcox and this is my newsletter about moving to and living in Portugal. If you’ve received it, then you either subscribed or someone was kind enough to forward it to you.
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This article is part two of two articles focused on the current housing situation in Portugal along with tips on how to find a suitable place to live if you’re a resident visa applicant1. The primary focus of these articles is on renting, but those who are considering purchasing a property in Portugal may find some of this information helpful as well.
You can read part one here.
I’m not an expert – and full disclosure.
Since I am not a housing expert, I decided to speak to someone who is – Olivia Houssiaux. Olivia is one of the founding partners of Portrait, an investment consulting and property management firm. The focus of Portrait is primarily on property investment, acting as buyers’ agents. Her company also works with clients who wish to rent in Portugal. When clients hire Olivia and her team, there’s no conflict of interest because Portrait does not hold or represent any real estate.
Full disclosure: Paul and I hired Olivia and her team in 2021 to help us find an apartment to rent in Portugal. My articles are not endorsements, and I am not compensated – there are other companies and realtors specializing in relocation - but since many of my subscribers ask to read about our personal experiences, for the record, both Paul and I can attest to the professionalism and experience Olivia and her team provided for us. As always, it’s your responsibility to do your own due diligence.
In Part one, we covered current trends in housing in Portugal including how prices have increased for rentals and home purchases over the last several years and the reasons why. Part two covers how to find rentals in Portugal, average prices for rentals, the documents expats need to secure a rental, what a lease is, and housing terms to know before you decide to rent or buy in Portugal.
Finding rentals in Portugal.
Possibly the most stressful aspect of moving to Portugal is finding a suitable rental. Many potential expats come to Portugal on scouting trips, hoping to find a rental, while others (like me and Paul) look for rentals remotely online.
If you live in the United States, you’re accustomed to scrolling real estate websites where practically all listings are placed on an online system called the Multiple Listing Service (MLS). This is a database established by real estate brokers in every state to provide data about properties in their area for sale regardless of whether it’s their listing or not. But in Portugal, it’s a little different.
No real centralized database.
In Portugal, there’s no centralized database which can make it even more challenging to find active, accurate listings for rent or for sale. Some databases are realtor-specific, meaning that you’ll only see their listings. Other databases are broader, with more listings by various realtors, but often not updated, meaning that if you have your heart set on a rental, it may already be reserved even if it’s still listed as active. It is also common to find the same property listed multiple times and at different prices. And if you attempt to contact a realtor about a listing using one of the databases’ contact forms, you may never hear back from them.
Olivia suggests that people interested in learning more about what is available for rent and in which areas that they start with an online search using some of the more popular online real estate databases to get an idea of location and price.
Here are some of the more popular online databases:
Once you have an idea of the area you wish to concentrate on, consider joining some of the Facebook expat groups in the area to connect with other expats and tenants to get input on neighborhoods, or even be alerted to properties that may be coming available.
Understand what Portugal is and what it is not.
One big problem that Olivia often encounters with clients looking to rent or buy in Portugal is understanding what Portugal is and what it is not. She points out that there’s a lot of misinformation out there about Portugal such as Portugal is cheap, or Portugal is always sunny, when in fact, Portugal is a small country with much weather and economic diversity. She finds that the people who are misinformed about the reality of Portugal come to the country with preconceived ideas and often end up being disappointed.
The Algarve isn’t a city.
Another misconception Olivia often encounters is the fact that many potential expats want to “live in the Algarve.” Paul and I understand this because initially, we too thought we wanted to “live in the Algarve.” The reasons we thought we wanted to live there was because we thought the climate was always sunny and warm, the terrain was flat, many retirees lived there, making it perhaps easier to make friends, it was cheaper than living in Lisbon or Porto, and there were a lot of English-speaking expats. But that’s not necessarily all true.
That’s not to say the Algarve isn’t nice – it is. But unless you have spent some time in this area, it’s bigger and more diverse than you may think.
Olivia likes to point out that the Algarve is a region in Portugal and not a city – it’s massive in size and with different price points for rentals or purchases. The nationalities residing in the Algarve vary depending on where in the Algarve you choose to live. She suggests that people interested in living in the Algarve really know which area they want to live in, the demographics of the area, the climate of the area, and if the area they like realistically fits their budget.
Real estate terms in Portugal.
Real estate terms in Portugal differ from real estate terms in the United States, so it’s important to familiarize yourself with the most common ones before looking for a rental or a purchase. Here are some of the more common terms:
T = apartment
V = attached villa
T0 = studio
T1 = one-bedroom - The number after the “T” indicates the number of bedrooms (T2, T3, etc.)
T1 + 1 indicates a one-bedroom plus an additional room that could be converted into another bedroom (same follows for T2+1, T3+1, etc.)
Quarto = bedroom
Casa de banho = bathroom (in Portugal a half bath or powder room – sink and toilet only - are often called “social baths”).
Sala de estar = living room
Sala de jantar = dining room
Cozinha = kitchen
Varanda = balcony
Terraço = terrace
Garagem = garage
Entrade = entrance
Elevador = elevator or lift
You can’t always get what you want, but you can get what you need.
Paul and I learned this lesson when in 2021 we began the search for an apartment to rent in Portugal. We began with a long “must have” list in an apartment and then another “nice to have” list just in case. Eventually, we had to pare those lists way down. You’ll have to decide for yourself what your criteria is. Olivia advises her clients to be realistic.
Documents you’ll need to rent an apartment in Portugal.
Olivia is often asked by her clients why they need to provide such intimate financial details to rent an apartment in Portugal. Well, it’s because people in Portugal (just like in the United States) ask for information. After all, you’re a foreigner looking to rent something. Why wouldn’t they ask? Don’t take it personally - they just don’t know who you are.
Think about it. In the United States, the documentation needed for renting an apartment or house is voluminous. We know this firsthand because after we sold our home in Arizona, we had to rent a house until we received our visas for Portugal. We were shocked by the number of documents needed. If you’ve rented a dwelling recently in the United States, you are probably aware of this. Among other things, in the United States, your application to rent an apartment or home will include a credit check, photo ID, social security number, recent pay stubs/proof of employment or proof of retirement income, number of years you have lived in your state, bank account statements, recent income tax returns and even perhaps a letter of reference from your former landlord if you were a previous renter.
In Portugal, here’s what you’ll need:
NIF a/k/a fiscal number. (This is widely used in Portugal for any retail purchases, rental contracts, and even required by health care professionals for billing purposes).
Income tax returns (2-3 years)
Proof of income (recent pay stubs, retirement/pension benefits letters, etc.)
Bank account statements. Three months of your most recent bank account statements from your home country. If you have a Portuguese bank account, you can include this as well.
Photo identification (passport).
Letter of introduction (Write a letter about yourself so that a prospective landlord knows who you are. Let them know what you did/do for a living and how much you earned, and why you’re moving to Portugal).
Guarantor. A rental can be guaranteed through a guarantor which is the inclusion of a third person in the rental contract, who will assume the cost of rent if the tenant defaults (in the United States, this is often referred to as a co-signer). A guarantor is not always required (for example, we did not need a guarantor). If you’re able to pay several months’ rent in advance, the need for a guarantor is often waived.
Rule of thumb: According to Olivia, most landlords will be looking to see if you earn 3 times as much as the monthly rent.
You should have all this documentation ready before you start looking for a rental.
Leases and increases.
A Lease (often referred to as a Contract), is the legal document outlining the conditions of the agreement to rent a property in Portugal. A valid contract is one where the landlord has registered the property with the Autoridade Tributária e aduaneira (AT) which is the tax and customs authority in Portugal. Ask for proof. Olivia advises that renters should never agree to paying rent under the table. For the D7 for example, you need a registered contract.
Example: the apartment we rent is registered. Every month when we pay the rent online via our Portuguese bank account, our landlord emails us a receipt from the tax and customs authority. The information on the receipt includes the month and year of the rent payment, the landlord’s name, our names, the address of the rental property, and the amount of rent paid.
How many years for a lease? To obtain a D7 visa, you need to prove that you have a minimum of a one-year registered lease. Sometimes subscribers contact me to ask my opinion about the length of a rental lease. Many are concerned about committing to a multiple-year lease, so I brought up this question to Olivia.
She suggests that renters opt in for a longer-term lease to avoid the potential for significant increases in the rent. “A one-year lease for a renter is a risk,” she said. “After the lease is up, the rent can increase significantly and if you don’t like it, you’ll have to leave. In this market, the landlord will quickly find someone else to rent to.”
Olivia further pointed out that a tenant can break a lease after a third of the contract is fulfilled, but a landlord is not allowed to drop a tenant after a third of the contract is fulfilled. That’s why she suggests trying to obtain a 3-to-5-year contract if possible.
How high can it go?
I asked Olivia how high a rent increase could go. She said that it depends on whether the contract is locked into a specific rate. If the rate has not been locked, a landlord can increase the rent as much as double at the end of the lease term.
Olivia mentioned that most contracts have a provision allowing for little adjustments for inflation due to a government regulation. This increase is not imposed by the landlord.
“Although Portugal wants to control rent increases at 2% per year, the Commission has not yet come to any conclusions”, she said.
You snooze. You lose.
In the current housing market in Portugal, Olivia encourages her clients to act quickly if they find a property they wish to rent. “Very often, it’s first come, first served,” she said. “You should be prepared to act fast and not require unnecessary provisions. Make sure you have your documents ready so that when a property you like is available you can act on it. You can’t look at a property, think about it for a few days, and then wait a week to decide. In this market it must be quick.”
A word of caution: There are online scams preying on people who want to rent a property in Portugal. Beware. If you feel as if you’re being forced into making a payment on a property you saw online, do not do it. Make sure you contact someone locally that can verify the property exists and is in the condition advertised.
“That’s why it’s important to go with a reliable, local, and reputable realtor or relocation professional,” Olivia said. “If you’re far away and don’t speak the language it’s advisable to have someone local working on your behalf – the conversation is very different when it’s local to local”.
Average prices for rents in Portugal.
I asked Olivia if she could provide a ballpark figure on what someone should expect to pay for rent based on a T2 (2 bedroom) apartment in different areas of the country:
Central Lisbon – 2,300 EU for a new apartment.
For a second-hand apartment in Central Lisbon (something that is in good condition but not brand new), 1,500 – 1,700 EU.
Porto – about 30% less expensive than in Lisbon.
Algarve – Olivia said it was impossible to provide a ballpark figure due to the economic and cultural diversity of the region.
Olivia noted that most rents will start at the first of the month.
Remember to factor in the exchange rate if you’re transferring funds from another country to Portugal. Depending on the exchange rate, you could actually be paying more per month for a rental in Portugal.
How far in advance to start looking?
I asked Olivia how far in advance would she suggest people planning to move to Portugal start the rental search or property purchasing process:
Property purchase: 6 months prior to the D7 visa appointment if the client knows what they want and where they want to live.
Renting – 2 to 3 months before the D7 visa appointment.
Don’t go it alone.
Once you have established where you’d like to live, get some help. Consider hiring a service like Olivia’s Portrait, or other relocation service. Or contact a licensed Realtor to assist you in finding a property to rent or purchase. Trying to find a place to live in a foreign country on your own is stressful. Having some professional assistance is a wise investment in your sanity.
If you'd like to get in touch with Olivia and her team: Portrait Email: email@example.com Phone: +351 961 029 947
Muito obrigada (many thanks) to Catherine, and Greg and Cheryl for supporting Our Portugal Journey through Buy Me a Coffee. Your generosity and interest help to keep this publication free to subscribers.
Until next time…
One of the most stressful aspects of moving to Portugal is to secure suitable housing to fulfill the D7 visa application requirements (and some of the other visa types). Generally speaking, applicants are required to provide proof of accommodation in Portugal for a minimum of one year. This can be in the form of a rental or purchase contract.