Where to invest money to yield returns in Portugal?

Are you thinking of optimising your finances and making your money work for you? The question, "where to invest money to yield returns," is one of the most common and relevant in the current economic context. At CasaMatch, we understand that the real estate market in Portugal remains a strong bet for profitability and security.

We analysed three real estate investment ideas, including initial costs and essential practical aspects.

1. Investing in parking spaces

Investing in a garage space or a box is a low-risk, low-maintenance approach that generates stable monthly income, especially in high-density urban areas where parking is a scarce commodity.

• Main Advantage: Low maintenance, constant demand, and stable income.
• Yield Calculation (Example): If you buy a parking space for 20.000€ and rent it out for 100€/month (1.200€/year), your average yield is 6%.

The typical yield for this type of asset is around 4% to 7%, with location being the decisive factor for long-term return.

2. Buying a house to renovate and sell (House flipping)

This is the classic strategy for those seeking quick profits in real estate. It consists of buying a property with potential at a below-market price, investing in its renovation, and selling it quickly for a significant profit margin.

• Renovation finances: Profit = Selling Price - (Purchase Price + Cost of Works + Taxes)
• The base renovation budget: The cost of the works is the most critical factor.
  • Average cost per square meter: 500€ to 1.000€/m², depending on the quality of materials and the complexity of the job.
  • Total investment: For a two-bedroom apartment (approx. 80m²) requiring total remodelling, the works budget realistically is about 60.000€.
• Warning: It is crucial to have good control over construction costs and a trustworthy construction partner.

3. Investing through real estate auctions

Auctions (judicial or private) can be an excellent answer to the question "where to invest money to yield returns" if you are looking for properties at very competitive prices.

• Benefits: Potential for acquisition at a value much lower than the market value. The process is regulated and transparent.
• Risks: Often, property visit beforehand is not allowed. The property may be occupied, and the eviction process can be long.
• Warning: The payment deadline is often only 15 days after the auction validation. This period is generally insufficient for the approval and formalisation of a traditional mortgage. Therefore, having your own capital (cash) or a strong pre-approval from a bank is essential.

One of the most used platforms is www.e-leiloes.pt.

Portugal offers diverse opportunities for those looking to invest money to yield returns. Whether you opt for the simplicity of a parking space, the risk/reward of a renovation, or entering auctions, the key is information and rigorous planning.

CasaMatch is here to help you find the right property!