A property renovation in Portugal is an awfully tempting prospect. A quick browse through property listings for the country reveals an enormous selection of potential projects. These span ruins, places that only need cosmetic attention, and homes with exciting expansion options. But before you sign anything, check out our guide to renovating homes in Portugal, from costs per metre to planning rules. We’ve included a couple of potential Portuguse renovation projects too.
Just because you can do something, it doesn’t always mean you should! This article covers that very important angle. However, there are several compelling reasons to undertake a property renovation in Portugal, such as:
- The prospect of undertaking a rewarding project that ends with you owning the home of your dreams.
- The potential for making serious profit from fixing up a property.
- Finding a way to own the kind of property you could never otherwise afford.
Undertaking a renovation is not for the faint of heart. You’re guaranteed a rollercoaster of emotions, unexpected events, complications and costs, but the reward at the end is potentially life-changing.
Furthermore, Portugal is a great place to kick off this kind of endeavour. The property market is buoyant, making a home there a great investment, especially when your renovation adds to its value. Then, of course, there’s the vast choice of suitable homes that need this kind of work. There are options at all budgets, whether you’re looking for a rural retreat, an apartment by the sea, or a bolthole in a vibrant city centre.
A successful Portuguese property renovation
To get your creative juices flowing, take a look at this newly renovated apartment, on sale for €500,000, in a very trendy part of Lisbon. It is in the Santa Catarina part of the city, super central. Need we point out that this apartment will have serious rental potential, all year. Flats in this area rent for as much as €300-600 per night on Airbnb.
The interior, packed with original features and painted in cool greys is bang on trend. The fixtures and fittings are top quality and unlike many Lisbon townhouses thre interior is bathed in light in both morning and afternoon. Should you be able to tear yourself away from the wonderful new living room and bthroom, the tram 28 passes the front door.
What makes this project so inspiring is that there are dozens of properties just like this all over Portugal. Going for a townhouse for renovation is just one of many options open to you – and potentially one of the cheapest too. Whoever renovated this property will surely be doing rather well out of it financially.
Three questions to ask yourself
If you’re considering a property renovation in Portugal, there are some important things to think about first. Start by considering the following:
- Is this a full-time or part-time project?
Do you plan to live in Portugal full-time while the project is in progress? Or is this something you want to manage from afar with occasional visits?
This then raises follow-up questions. For example, if you’re planning to tackle your renovation as a full-time project, are you willing to “live on a building site?” Are you happy to live in a single room and shuffle around as each part is completed?
If you’re planning to do things from a distance, it’s worth asking yourself whether you truly want to spend every forthcoming holiday on your renovation project. Obviously, the payoff is worth the effort, but it is vital to be realistic.
- How much work can you take on?
Are you willing to undertake structural work, with all of the difficulty that could entail? Or would you rather limit your renovation to painting, decorating and carpentry? There’s no wrong answer. You can find renovation projects in Portugal at every level – from places that need rebuilding, to homes that merely need a cosmetic update.
- Do you intend to do much of the work yourself?
Are you planning to subcontract and manage your project, or do you want to get your hands dirty? There are obviously some tasks where you’ll need experts, and in some situations using them is legally mandatory. Can you speak enough Portuguese to manage these people, or will you need help?
And if you do plan to do work yourself, is it work that you know you have an aptitude for? Do you have any previous experience of it?
As previously stated, there’s no right or wrong answer to these questions, but it still makes sense to consider all of them before getting started!
What makes Portugal so good for renovation?
There are several reasons why Portugal is a great place to get stuck into a renovation project. Labour is inexpensive, and there are plenty of skilled tradespeople. A dry climate, at least in the south of the country, means that weather shouldn’t disrupt your plans too often. Finally, there are good legal protections, including a mandatory five-year warranty on works undertaken. (It’s important to note that you must report faults within one year).
However, all countries have their quirks, and Portugal is no different. Rushing headlong into a project without learning these quirks is a recipe for trouble. With that in mind, here are some important considerations to be aware of when renovating a home in Portugal:
- Ensure you can actually do what you plan
It’s usually quite straightforward to find out whether you’re allowed to build on certain land. You will likely need the help of the local town hall (camara). It’s important that you find out for sure. Landing up with a piece of land you can’t build on, or a ruin you can’t extend, is not something you want to happen.
- Remember that you’ll usually need a building licence
With the exception of small renovation projects that are primarily internal, you’ll usually need a building licence. Obtaining one involves hiring an architect to draw up plans for you.
Sometimes you may see renovation projects where the permissions are already in place. Beware, however, that these licences are time-limited – usually to one year with a possibility to renew. You’ll need to ensure that the planning remains in place, and that the plans meet your requirements and not just what the seller had in mind.
- Be aware of the Portuguese pace of life
If you expect life in Portugal to proceed at UK-pace, disappointment and frustration is certain. Things like arranging electricity and telecoms connections can take a long time. Obtaining planning consents can also prove a glacial process, and not one that will speed up if you show aggression or frustration.
The practicalities of renovating property in Portugal
As with any renovation project anywhere, you’ll want to know what it’s all going to cost you. A sensible starting point is to seek recommendations of local firms. Then, create a shortlist and seek quotes for the work from the three that seem most credible.
While it may seem like an easy route to opt for an English company, it could only prove beneficial to you in language terms. Looking for companies with a good track record and manufacturer-accredited training will likely serve you better.
As discussed above, you do have decent legal protection in Portugal, but of course that depends on how well you lay out a contract. One thing you can do is build in firm deadlines complete with penalties for missing those deadlines. Portugal does have a thriving black economy, but there are obvious risks to doing “under the radar” deals in the hope of saving some money. Such deals could cost you dramatically more in the long run.
It’s worth being aware of the Portuguese “complaints book” (the Livro de Reclamacoes), which all companies must have. Complaints entered in the book face scrutiny from local officials, so the threat of such of a complaint can carry some weight. However, you can – of course – only seek recourse if you’re doing things properly – another reason to steer clear of “for cash” work on anything important.
RICS (the Royal Institution of Chartered Surveyors) has a presence in Portugal that may prove useful to you.
The costs of renovating property in Portugal
Estimating the cost of any property renovation is rather a case of “how long’s a piece of string?” However, it’s possible to give an approximate indication.
Building costs in Portugal are fairly low by EU standards. One recent estimate names a price of €200-400 per square metre for renovation work and up to €700 per square meter for new build work of “European standard.” Planning costs are typically in the range of €2,000.
If you take on a renovation project, effective budgeting is vital. That can be impossible as exchange rates move each day. We recommend you contact Smart Currency Exchange to discuss options for protecting your currency. With offices in London and the Algarve, they are the Portuguese property buying specialists.
If you’re treating your property renovation in Portugal as a profit-making exercise, it’s important to remember that nothing’s certain. There is a lot of property stock in more rural areas making such fixer-uppers far from a “dead-cert.” Such investment-renovations are arguably best suited to the most in-demand areas such as Lisbon and the Algarve.
Having said that, the good news is that property prices are on the rise in Portugal. Forecasts don’t see this changing in the coming years, making a project anywhere in a country a relatively safe bet.
Properties to renovate in Portugal
Tavira: tardis or townhouse? €165,000
This may look like a tiny little cottage, but it actually has an internal area of 120 square metres. The €165,000 townhouse in the centre of town has planning approval to revamp its two bedrooms and two bathrooms, large courtyard and terrace. While there are plans already approved, you can choose to create your own design instead.
We have written about the appeal of Tavira, also known as Santa Maria e Santiago. If you’re looking for an affordable renovation project at the heart of an Algarve community, this could be the one. It’s so easy to reach from the airport, in about 20 minutes, that you won’t need a car, but it does have parking anyway.
Silver Coast manor house: €925,000
This one is a bit special. Set in the lovely seaside town of Figuera da Foz, it is a colonial style manor house with 16 bedrooms. Just two minutes walk from the town’s gorgeous sandy beach, it would make a wonderful hotel. Maybe you’re thinking it’s too much of a challenge? Then take inspiration from the Duke of Wellington, who arrived in the town with his army on 1 August 1808 and proceeded to kick Napolean all the way out of the Iberian peninsula!
The town has a population of 46,000, enough that it doesn’t close down all winter like some Algarve resorts. It’s easy to reach all year too, being just over an hour from Porto and just under two hours from Lisbon.