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Thinking about Renting a house in Portugal? Renters, in Portugal are facing a time finding a house due to market changes happening there recently.
The rise in tourism has led to short term rentals and the surge in property prices due, to investments has made it harder to find affordable long term rentals.
This article looks into why rental properties are becoming scarce and expensive in Portugal and how the changing economic situation is affecting both locals and newcomers looking for a place to live there.
Why is Renting a house in Portugal Becoming so Difficult?
A set of reasons has lead to gradually the rental house in Portugal becoming scarce:
1. Immigration to Portugal
Portugal is now in vogue as a destination for expats, digital nomads, and tourists. That growth in demand for housing, and particularly in cities like Lisbon and Porto and the coast of Algarve has increased popularity.
The foreign population residing in Portugal increased over the last years and in 2023, totalizing almost 1,6 millions.
2. Short-Term Rental in Portugal
Discussing about the house, homeowners tend to prefer short-term rentals in services like Airbnb rather than long leases, as it generates more profit. The effect of this shift is to reduce the amount of housing stock available for long-term rental.
3. Escalating Property Prices
Extensive foreign property investment means that real estate has become extensive and expensive. Even those owners who are so kind as to rent out their properties at low rates may also see that they can get a better return by selling and then renting back, or more often though vacation rentals.
4. Shortage of Supply
Adequate investment in affordable rental housing has been lacking, and much new supply is luxury-based – more for homeownership not for those looking to rent affordably.
5. Regulation Changes
With new restrictions from the government around rental contracts, some have become reluctant to rent long term as they feel it could be very challenging to evict tenants if things go wrong.
6. Golden Visa and Foreign Investment
The Golden Visa program and favorable tax policies for foreign investors have encouraged higher inflows of property purchases for investment and led to an increase in real estate prices, reducing rental availability at affordable levels to locals.
Future Challenges of Renting a House in Portugal?
That is the million-dollar question. Real estate experts argue that housing prices rise mainly due to limited new construction, slowed by regulations and bureaucracy.
At the same time, the government introduced the “Pacote Mais Habitação” in late 2023 to curb price growth, including:
Ending the Golden Visa for Real Estate
Foreigners can no longer qualify for the Golden Visa by purchasing property, as the government believes foreign demand has driven up prices.
Restricting Short-Term Rental Licenses
New licenses are no longer granted in coastal areas and the Algarve. Buyers can only inherit existing licenses, pushing investors to focus on long-term rentals.
Ending the NHR Program
The popular Non-Habitual Resident tax regime was reformed, limiting benefits for retirees and professionals. Authorities claim it had fulfilled its goals and reducing incentives would ease foreign-driven housing demand.
Renting a House in Portugal: What Should i know?
Renting a place in Portugal can be the beginnings of an exciting adventure, but even entry to the market is fiercely competitive.
High Demand
The rental market in Portugal is very active, especially in urban areas (including Lisbon and Porto) as well as coastal regions (such as the Algarve). This competition also create quick turnover, as most people list properties hoping to sell them quickly.
Documentation for Renting a House in Portugal
Landlords usually ask for proof of income, such as salary slips, bank statements, or tax returns. If you are self-employed, you may also need to provide business accounts or invoices. Having these documents ready will make the rental process faster and easier.
Upfront Payments
In Portugal, it’s common for landlords to request upfront payments before move-in. Expect to pay at least two months’ rent plus two months’ deposit — around four months of rental costs in total. Non-residents may face stricter requirements, such as providing a Portuguese guarantor or paying an extra month in advance.
Contract Duration
Most rental contracts in Portugal run for a minimum of 12 months. While month-to-month agreements exist, landlords usually prefer longer terms for stability. If you plan to sublet, always clarify this with the landlord beforehand.
Early Termination
Leases typically allow tenants to cancel the contract after one-third of the term, provided they give 90 days’ notice. For example, in a 12-month lease, you must remain at least seven months before terminating. Always review this clause carefully to ensure you’re comfortable with the conditions before signing.
Get In Touch With Us
Portugal Residency Advisors® has helped hundreds of international families and investors secure residency, citizenship, and investments in Portugal. Discover how our trusted approach makes your move simple and successful.
Step-by-Step Guide for Renting a house in Portugal
Step 1: Choose Your Location
The first step in renting in Portugal is deciding where you want to live. Research neighborhoods, keeping in mind work, schools, transport, and amenities. Visiting areas in person will help you get a true feel for the community.
Step 2: Begin the Search for Renting a house in Portugal
Start your house hunt on trusted platforms like OLX and Idealista, along with local real estate agencies. Networking with locals and expat groups can also reveal rental opportunities that aren’t listed online.
Step 3: Prepare Documents
Most landlords require proof of income (payslips, tax returns), ID, and sometimes references. Non-residents often need a Portuguese guarantor or extra financial guarantees, which is a common part of renting in Portugal.
Step 4: View Properties
Schedule visits and carefully inspect each property. Ask landlords about the lease terms, utility costs, and maintenance responsibilities to avoid surprises.
Step 5: Sign the Lease
Once you agree on terms, sign the lease together with the landlord. Always request a signed copy for your records — an essential part of safely renting in Portugal.
Step 6: Make Upfront Payments
Expect to pay at least two months’ rent plus two deposits upfront. Always ask for receipts to confirm your payments.
Step 7: Set Up Utilities
If utilities aren’t included, you’ll need to set them up in your name or negotiate them into the rent. Make sure everything is connected and working before moving in.
Tips for Renting a House in Portugal
Do Some Market Research
Educate yourself about the going rates of rent in your would-be neighborhood. It will enable you to tell how much is a fair price for what you are getting and save you from overpaying.
Only reputable websites
Hire reputable rental platforms or local real estate agencies to find listings. Either is a good way to protect yourself from a scam or ensure your potential landlord is honest.
Check it Out
Before you make a written commitment, visit the property. This is key for you to verify that the house is in a certain condition or standard.
Don’t forget about Local Laws
These can differ depending on your area, so be sure to follow local laws and make an effort to comply with any regional rental regulations. If you know your rights as a tenant, many issues can be resolved before they come too problematic during your rental period.
For more videos about investing or moving to Portugal, explore our YouTube channel here: YouTube Channel Portugal Residency Advisors®.
House Rental Prices in Portugal
According to Idealista, the largest property search website, the asking price for renting an apartment with 75m2 is a bit cheaper in Viseu and Santarém with average monthly rent of €503 and 608, respectively.
Regions in the mid-range, like Braga, Aveiro and Leiria have rents between 705€-728€ and Coimbra averages a rent of 803€. These include Setúbal at an average of €990 or Faro where it can cost approximately €1,095.
Cascais, Lisbon and Porto have the highest rents at €1,515, €1,500 and €1.155 per month respectively due to demand and desirable locations.
Madeira comes in second with costs rising to €1,028. This variation illustrates how location, demand, and amenities influence rental prices throughout Portugal.
How We Ca Help
If you’re looking to rent a home in Portugal, partnering with a reliable advisor can make the process smoother and more efficient.
At Portugal Residency Advisors®, we offer expert knowledge of the local rental market, helping you understand rental prices, neighborhood dynamics, and current trends.
We assist in finding rental properties that match your needs, arranging viewings, and negotiating lease terms on your behalf.
We also provide objective advice, guiding you through the pros and cons of each rental option.
From understanding legal requirements to managing contracts and ensuring all paperwork is handled correctly, we’re here to support you.
With Portugal Residency Advisors®, you’ll save time and stress, while finding the perfect rental property in Portugal with confidence.
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