Portugal – the key to good property management and …

Partner with the right company

When buying a home in a foreign country there is a lot to know, from rental licenses to local authority regulations – so it is useful for investors to partner with an experienced local letting agent or a vacation rental property management company.

Such a company can help you understand everything you need to know about the market, your rights and responsibilities, if there are any limits to renting your home as a vacation rental, and your stance on things like relief. tax and other financial considerations.

A good, reliable property management company will put you at ease and take all the pressure off of having a holiday home abroad. They’ll find the best places to advertise your home, tell you when high season might be in a given location (so you can maximize occupancy rates and the income you receive), and provide you with information. locations – such as the best restaurants and beaches. are – so that you can pass it on to those who rent out your vacation home.

They will also take care of the rental process itself, to make sure everything is compliant and in place, and will deal with any inquiries or complaints as they arise. Plus, they’ll be on hand to sort out any maintenance issues – whether it’s the pool or the kitchen – and make sure your home is kept in good repair between stays. They’ll sort reservations, manage the rental schedule, and be aware of all rental payments, so you don’t have to.

The best property management companies will make your investment as easy as possible, so you won’t even have to think twice about the condition of your home. But they will also tailor their services to your needs – if you want to be more active and informed, this can be arranged, while a more detached, hands-off approach can also be facilitated.

The little touches

These days, online reviews on sites like TripAdvisor, Booking.com, Airbnb and HomeAway can make or break a vacation home, as people will more than likely check reviews before booking. But homeowners can ensure their homes get positive reviews by going the extra mile and standing out from the competition, adding these little touches to ensure vacationers return home happy after a stay at their properties.

Again, this is where a good property management company comes into its own, offering the kind of attentive, 24-hour VIP service that vacationers appreciate. At Ideal Homes Portugal, for example, we have a number of partnerships with local service providers to ensure that a person’s stay is enjoyable, memorable and a better experience than a hotel stay.

Covid has led people to seek more space and privacy while on vacation, resulting in a shift away from hotels – many of which had to close during the worst of the pandemic – towards holiday homes and accommodation self-contained Airbnb-style apartments. Adding nice little extras, like a welcome pack (with fruit, water, cheese, milk and bread, for example), or arranging transport from the airport, or having someone to meet guests when they arrive, can make everything better and enhance an experience.

Available but not intrusive

On vacation, people generally want to be left alone unless there is a problem to be solved. So while it’s important for a management company to be attentive and available, there’s a fine line between that and being too intrusive.

The best property management companies will understand the importance of this balance and will only intervene when necessary.

Time is running out – six months left to buy a holiday home in Portugal’s hotspots

In other Portugal-based news, Norton Finance has reminded investors that there are just six months left to buy a holiday home in the Algarve, Porto and Lisbon using the Golden Visa – and says re-mortgage could help people to go there.

Although Portugal is currently on the travel orange list, with travel there advised against, people can still travel abroad to buy a second home provided they meet all testing and quarantine requirements. The travel exemption, dubbed the Stanley Johnson loophole after the Prime Minister’s father who frequents Greece, allows people to travel abroad “in connection with the purchase, sale, rental or lease of residential property”.

Norton Finance warns that upcoming changes to current legislation on the purchase of second homes in certain regions of Portugal will come into force from January 1, 2022. This will limit investors who will not be able to buy properties in areas with high demand such as Lisbon, Porto and the Algarve when using the country’s Golden Visa scheme, which has been open to Britons since January this year.

For those interested in investing in real estate in these popular areas, Norton says now is the perfect time to do so.

Why buy in Portugal?

Portugal currently offers two incentive schemes for foreign buyers which will continue until 2022. The Non-Habitual Resident (NHR) tax scheme offers a 10% rate on pensions and tax exemptions on most income from foreign sources .

Meanwhile, the Portuguese Residence Permit (also called Golden Visa) allows people to live, work and study in Portugal, while also allowing free travel within the Schengen area. After five years, applicants can claim permanent residency and even citizenship in Portugal.

What is the process for buying a second home?

Norton says remortgaging or releasing the equity in a current home is a popular option for many looking to finance a vacation home abroad.

“You don’t always need the services of a lawyer, but it’s always worth checking with your mortgage lender. However, you will need to have your property appraised to determine how much you can borrow,” adds the Norton team.

“Your personal and individual circumstances will determine whether you are able to remortgage your current property. To get a second mortgage to buy a second home, you need to be comfortably able to meet your existing commitments. »

He continues: “To consider taking out a second mortgage, you will of course have to meet the requirements of a lender. The lender will verify that you can maintain disposable income while comfortably managing your expenses so that you can meet the loan requirements.

For tax reasons, Norton says that a vacation home is not legally your primary residence, even if you intend to occupy that home for part of the year. “It’s worth considering that renting out your second home can be a useful option to help fund mortgage payments,” he adds.

“If you have the financial means to buy a property in Portugal, then you can start your search. It is advisable to speak to as many estate agents in Portugal as possible, in order to have the best information on the local market. It is always advisable to have a Portuguese lawyer to work on your behalf to ensure that all legal documents are correctly translated and understood.

If you’re looking to invest in a buy-to-let, Norton has a mortgage calculator that aims to give an idea of ​​the current market to help investors decide if the mortgage to buy a second property is right for them.

Norton advises that if investors are considering borrowing to buy another rental property, consider that they will need a down payment of 15-25%.