With the popularity of Lisbon, Porto has often been overlooked by overseas property investors. However, as property prices become expensive in the Portuguese capital, investors are now looking to Portugal’s second city.
The success of the Portuguese government’s innovative Golden Residence Permit Programme has attracted many overseas investors to Portugal, and particularly Lisbon as the capital is one of the most historic cities in Europe.
This popularity does bring consequences with property prices rising steeply and the the immigration office in Lisbon being swamped with applications from around the world for several years now in relation to the Golden Residence Permit Programme.
Therefore investor attention has begun to move across to Porto as an affordable alternative without the delays that can be experienced in Lisbon.
Until 2012 the city of Porto had some very archaic and counter-productive rental laws. This legislation has since been overturned and property owners in the nation’s second city are now beginning to see some really impressive rental yields.
With property prices around 30-40 per cent lower than Lisbon, rental yields are naturally higher, attracting buy to let investors.
Decent rental yields are not all that Porto has to offer
Much of Porto has been favourably compared to Lisbon’s Chaido district ten years ago; a district that has seen property prices rise hugely over recent years, implying that the same could happen in Porto, bringing excellent capital returns.
A historical city itself located on the Douro river, with mainly baroque architecture like Lisbon, Porto boasts miles of bankside properties with river views.
The Ribeira district in the centre of the city is a UNESCO world heritage site, so guaranteed to retain its historical feel.
Add blue flag beaches to the equation and it is easy to see why attention is turning towards Porto.
The Portuguese government is also doing its bit for Porto, with over 1,000 redevelopment projects in the pipeline, which in turn is encouraging many new restaurants and coffee shops to spring up across the city.
If applying for the Golden Residence Permit Programme the property investment threshold is €500,000. However, this threshold does not have to be reached with just one property.
More affordable property porices in Porto means that it could be an option to buy several properties and use a combination of those to rent out on short-term, medium-term or long-term tenancies. That way you could take advantage of the stability of tenants who stay for years, while also tapping into lucrative short-term markets.
With a long historical relationship with the UK – not least the supply of port – Porto could be the perfect place for British overseas property investors.