The 7 characteristics of real estate investors in Portugal

7 Key Factors for a good real estate investment 

1. The Location factor

For the new homeowner, location is a central factor when purchasing a home. This is important to evaluate in terms of quality, location, and value.

When the goal is to acquire a property for future investment, location is an even more relevant key factor. The reference analysis point being the rental price of the market for that space and how the market currently works, and a direct comparison between those.  

2. Good areas and dimensions

The area of the property, in terms of size, lighting and condition, are central factors in the investor's research, who often opt for homes with generous space. Among the rooms where this aspect seems to be most crucial are the kitchen and the living rooms.

It is also important to know how many rooms a property has, and whether there is the possibility of having an office space or a guest room for visitors. With the expansion of teleworking, many people spend more time at home and so there is even more importance placed upon airy, light and spacious areas. This becomes a crucial differentiator when buying a property. On average, the T3 seems to be the new owner's favourite type of property, when looking nationally across Portugal.

3. Quality counts

When purchasing your property, the buyer will pay attention to some important structural aspects. One of the main points of analysis concerns the age of the building and the quality of its construction.

In both the analysis carried out by the property appraiser, and in order to attract attention at the time of the visit, the quality of the property is fundamental. Considerations such as the paint quality, humidity and sanitation significantly impact an increase or decrease in the price. Problems in these areas can quickly harm the investor.

4. Pay attention to infrastructure

When searching for a property to invest in, new owners need not only analyze the space, but also the services associated with it.

It is worth highlighting the importance of having a good transport and access network. If the property does not have its own garage, it is also important to know how parking works nearby.

Further, one must understand how the property is located in terms of proximity to schools, supermarkets, grocery stores, restaurants, basic necessities and the ease of distance in relation to them.

Finally, there are those who also consider proximity to cultural, leisure and even tourism buildings as extremely important. If you are buying a property to invest as tourist accommodation in a city which has a lot of demand, such as Porto, Lisbon and Algarve then this is an additional factor worth considering.

5. Security is essential for investing

When investing, security is a topic that cannot be forgotten.

Ideally, the property will already have a security system installed by the condominium, but if that is not the case, it is important to create a modern, technological and effective security system.

In addition to the building itself, it is important that the area where the house is located is also a safe area, with no reports of major incidents. Anything to the contrary could harm future sales or rentals. Check online and even within your local neighborhood.

6. Energy certification

An increasingly common concern among new owners is the energy certification of acquired properties. There are many buyers who, before making their decision, want to know the energy performance of the house or the building in which the house is included.

In order to rent or sell the house, you must have your energy certification up to date, this being one of the essential documents for any sale or rent process, and therefore a very important point of analysis by any investor.

7. Timing

In combination with the previous points, all of which are extremely important when investing in a property, the investor must also carry out a good timing analysis. That is, to understand whether this will be the best time to invest in a given location. To do this, you must consult the most recent real estate investment reports, such as those we provide at Engel & Volkers. Based upon this analysis, you must decide whether the real estate investment will pay off, or become a source of difficulty and loss. If necessary, our help is available to navigate this analysis and decision making process. 

In summary, successful real estate investment relies on key factors such as location, property size, and quality construction. Access to amenities, security, and energy certification also play vital roles in determining a property's value and appeal. Additionally, analysing market timing is crucial to ensure a profitable investment. By considering these elements, investors can make informed decisions that maximise their returns and minimise risks.

These must be followed by real estate investors in Portugal and other parts of the world, with the aim of making the best decision, and getting the best deal. At Engerl & Volkers we are always available to advise you at any stage of your real estate investment.