Greetings from Porto airport.
I’m flying home after a whirlwind 48 hours in northern Portugal.
My whistle stop visit to Porto and Caminha is coming to an end. I’ll return here in July.
You’ll have to wait until then for a walkthrough of my new home. Right now, it’s a mess of ripped-out kitchen and bathroom.
Yesterday afternoon, warm sunshine spilled over Porto. The al fresco bars and restaurants were packed. It had a true early summer feel…
In Porto yesterday, I found luxury condos priced as high as $1,000 per square foot. But also nice central resale properties for half that ($500 per square foot). Just an hour north of here, I paid $90 per square foot for a move-in ready historic home with incredible views of the lagoon, the ocean, and Spain.
Things have changed a lot since 2012 when draconian rent controls where abolished. For years rents in Portugal were capped at almost nothing in prime central historic buildings.
There was no economic case for landlords to maintain the buildings, or even, in many cases, deal with the trouble of collecting rent. Vast swaths of Porto and Lisbon were abandoned. (In the medium to long term, limiting private property rights and personal freedoms never works out well.)
Then came a transformation: rent controls were removed, the Portuguese government aggressively worked to attract capital and buyers for the renovation of these buildings, using tax breaks and its golden visa program.
Portugal became trendy…
I found Porto’s skyline full of cranes on my visit…the gentrification is in full swing!
Broader internationalization trends and a booming tech sector also played into this, as Europe’s fringy tech scene migrated from Berlin to Lisbon. (Interestingly they came to Berlin as part of another transformation, the fall of the Berlin Wall, but we’ll leave that for another day.)
Values soared. Members of my Real Estate Trend Alert (RETA) group who got in on our Porto recommendations made out like bandits. Just like Lisbon five years earlier. That’s what we do at RETA…buy the right real estate ahead of big transformations.
Today I mostly come to Porto to be a tourist for a day or two, and to eat great Indian food.
Our Portugal opportunities are elsewhere. Down in Lagos if you want to do it the easy way…
Lagos is the most vibrant and livable town in Portugal’s Algarve. This is a place of soaring cliffs, stunning beaches, cobblestone streets, gourmet restaurants, and year-round sunshine. Here, you can stroll from a golden-sand beach to a marina full of sleek yachts to a charming old town of historic lanes and artisan cafés.
I recently brought RETA members an incredible deal here, in the small, prestigious neighborhood of Porto de Mos. Here RETA members had the chance to own stunning, ultra-luxurious two-bed condos with spacious terraces from only €498,500.
And they got a great deal…
- I expect gains of €311,500 five years after delivery.
- I expect gross income of €56,000 per year (that’s a gross yield of more than 11%)
- Mortgages are readily available to foreign buyers in Portugal at incredible rates like 2.7%, which means RETA members had the chance to own here from €1,883 per month
By the way, Lagos is the site of some of the best deals in the history of RETA, with members seeing mind-blowing uplifts like €274,000, €414,500, and even €1.1 million on our past opportunities there.
The neighborhood of Porto de Mos is set along one of the most dramatic stretches of coast on the Algarve, a stunning collection of coves, sea arches, caves, and outcroppings. And nestled between them are some of Portugal’s best beaches.
Or, to explore another avenue… if you’re willing to get your hands dirty and get stuck into a project, drive 56 minutes north to Caminha.
I’ve had success (both from a financial and lifestyle perspective) doing things the easy Algarve way…I’ve made a home on the Silver Coast that turned out to be a great investment…now my attention is on my Caminha project.
I’m also looking at what else is on the market here.
I found properties for as little as $50 per square foot…that’s for homes that need a lot of work. Buying a fixer-upper isn’t for everyone. But you can also buy turnkey real estate in Caminha.
This place has charmed me. I hope for lifestyle benefits. But I’m very confident in the financial upside.
After my trip, I have a lot to dissect and to share…that’s why, when I get back to my desk in Ireland, I’m going to sit down with RETA Senior Researcher Margaret Summerfield and record a video on everything I’ve seen.
The transformation…the opportunities…and how time is running out to act in Caminha…
I’ll send you our conversation on Friday. Stay tuned…
Wishing you good real estate investing,
P.S. Check out this video I recorded during my scouting trip to Porto in October 2023, where I discuss Porto’s transformation and how it ties in with the RETA story.
Let me take you on walking tour of Porto.
