How to turn a bank repossessed property in the Algarve into a profitable real estate venture

The first step

First thing's first, get your pre-approval. This is a very straightforward process which will only take you up to 48 hours and will show if you qualify to purchase a property in Portugal along with how much you will be able to get financed.

Getting your tax number (NIF) and bank account

This may be the more time consuming part of the process but one that, if well assisted, will get you in the market within a matter of a few weeks. The easiest way is to apply with the aid of a lawyer. In this case you can expect to complete the following steps:

• Send your lawyer a copy of your passport and proof of address. The lawyer will then draw up a power of attorney document and send this to you, which will all go through in a matter of a couple of days
• Once you have received the document, you must sign it at your local notary office and get the document apostilled, and send it back over to the lawyer. A process which should only take 1 to 2 weeks, depending of course on how quickly you can get to your local notary and apostille the document, and how quickly you send the document back. 

Mortgage approval process

You will need to present the required documents at this point including your last tax returns, bank statements going back 3 months and 3 pay slips along with proof of income. Within 1 to 2 weeks you will be approved and can move forward with purchasing your property.

With interest rates at an all time low in Portugal, this would be the ideal time to take advantage and purchase a property as an investment opportunity or a relocation move for you and your family. 

If it's not a repo property, banks are willing to grant a mortgage of 70 - 80% for foreign buyers and up to 90% for Portuguese citizens and residents.

Below is a mortgage simulation FOR 100% FINANCE

Variable Rate

Purchase Price    -  410,000€

Interest Rate        - 1.4%

Duration Period    - 40 years / 480 months

Monthly Payment - 892.82€

Fixed Rate

Purchase Price   - 410.000€

Interest Rate       - 1.75%

Duration Period   - 40 years / 480 months

Monthly Payment - 950.66€

The Deed

Although you are getting 100% financing, there are costs associated with purchasing any property in Portugal. You can count on 6 to 8% of the value of the property which covers: 

• Legal fees - 1-2%
• Notary and registration fees - 1-2%
• Municipal tax - 0-6%
• Stamp Duty - 0.4-0.8%

I’ve purchased my property, now what?

At this point, you may have already seen the work that needs to be done and are aware of the costs of getting your property in great shape. You’ll find there are many properties in Portugal that only need a little bit of TLC! Ultimately, the time to prepare your property for a resale or for rentals is dependent on the amount of work that needs to be done. 

Once you have refurbished your property

Here you can decide whether to sell it for a profit, or alternatively, use it as a holiday investment to generate you great rental income! The Algarve is known as a year long holiday destination for international travellers, as well as the Portuguese themselves, who flock to the Algarve in search of sunny skies, golden stretches of sand and warm waters. All of this combined makes the Algarve the perfect place to own a rental property. 

PROPERTY MANAGEMENT AND RENTAL PACKAGE

• Arrange and oversee building and maintenance works at the property
• Arranging a deep clean
• Utility setup (gas, water and electricity)
• Furnishing your property
• TV and Internet setup
• Insurances
• Helping you with rental laws and regulations in Portugal
• Monthly property checks
• Advertising your property across all popular rental platforms through our seamless channel management which maximises your property’s exposure.
• Full rental management (enquiries, booking and payments).
• Payments to your bank account for your bookings.

With our experiences and our property management and rental packages, you can sit back and relax knowing that we will take care of your property and maximise your return on your investment, contact the team TODAY to find out what options we have available for you. Give us a call on +351 289 513 434 or you can email on info@idealhomesinternational.com 

ESTIMATED RENTAL INCOME PER YEAR FOR THIS PROPERTY