Coronavirus, as everyone knows, has changed the world. Economic impact the likes of which have never been seen before. Unprecedented restrictions on travel. Suddenly, a world that had appeared so small, now seems just a little more difficult to criss-cross.
For those in North America, chomping at the bit to get to Europe, these are frustrating times. Portugal is the world’s 17th most visited country (out of 180). SEVENTEENTH. Top 10%. The world’s favourite retirement country, Portugal, and the world’s favourite retirement destination, the Algarve, are as anxious to receive overseas visitors and future residents, as those residents are eager to make their way there.
Here are a few ideas about how to bridge this gap, while flight restrictions, lockdowns and quarantines seem to be the daily buzzwords, but never losing sight of the fact that safety is paramount!
Work with a finder agent
Many real estate agents in Portugal will tell you that this option does not exist. Don’t be fooled! What they really mean is that they would prefer not to share their sales commission with anyone else. A buying agent always shares because they understand that the probability of a property being listed and located via an agent, is high.
Take the example of Emma, who decided to purchase an investment property in Portugal, but could not physically get to the country due to travel restrictions. Emma had chosen Porto, a city she had visited and loved, as the place where she wanted to buy. Using www.propertyfinderportugal.com as a finder agent, the company dealt with every step of the process, including recommending a lawyer and introducing Emma to an experienced mortgage broker. Because Emma had someone on her side as a buyer, she was presented with options from owners, real estate agents and listings on both English and Portuguese sites.
A multilingual team meant Emma could access the entire market, with no language barriers. After a process of around 6 weeks involving long-lists and short-lists, virtual tours and video-visits, Emma selected a fully-refurbished 3-bedroom apartment in the heart of Porto, with the benefit of a massive outside terrace and walking distance to Boavista and Porto’s famous Crystal Palace gardens, as well as an easy downhill stroll to the river Douro. With the team negotiating on her behalf, the price was agreed at €265,000. When Emma received news of approval from the bank, she informed the team: “You had better sit down, the bank valued it at €343,000….I had them confirm it twice as I thought they had the incorrect property!” When Emma completed on her purchase, she had earned instant equity of €78K or an almost 30%! And all this during the Covid-19 crisis.
Sign up to a mailing list
Don’t let anyone tell you they have exclusive access to “off-market” deals. Almost everything in Portugal is for sale, it is only a question of price. If someone has a good contact in a bank, for example, it may be that you can get on their “friends and family list” although bank deals in Portugal do not generally offer great value – they are more competitive in Spain. If your contact on the ground is only based in one region, they can’t really claim to be knowledgeable of others or have an “inside track” so they are likely to be pushing only one location. Access to good opportunities is all about the network. The larger it is, the more likely an opportunity will pop up.
Get yourself on an investor mailing list of a company such as www.algarveseniorliving.com. With its formal network of more than 100 real estate partners in Portugal, direct agreements with more than 200 long-let owners or managers, and a dedicated back office team focussed on both market research as well as investment analysis, including financial returns, the team will e-mail when a specific opportunity comes up. In most cases, you will need to act quickly, so the team will work with you to ensure that you have granted a Power of Attorney to an attorney, who will in turn request a fiscal number (essential to make offers for bank inventory and often for repossessions) and complete other administrative tasks.
Consider renting before buying
With selling prices continuing to increase, the rental market remains generally tight. In greater Lisbon/Cascais and Porto, where long-term rental prices have softened, potential buyers look to rent while watching what the market does. With transaction times in these locations becoming longer, and some pent-up anxiety among sellers due to Coronavirus, buyers are hoping to find better-priced opportunities.
In the most popular locations of the Algarve, summer demand was decimated by the complete absence of tourists. Many property owners made a “temporary” move from the short-term to medium-term rental market, which caused confusion. Renters thought they were going to have access to more inventory, only to find that all these owners wanted was to plug the gap until a hopefully better 2021 season!
As a result, good stock such as villas and well-located apartments close to amenities were quickly snapped up by clients, immediately after they were able to travel, or those willing to book a future start date.
The result has been a surge of interest in winter stays and long-term rentals. www.algarvelonglets.com has been inundated with enquiries from people of many nationalities looking for accommodation for more than a few months. Enquiries range from families with children planning to attend the region’s international schools, to retirees needing contracts for the D7 applications, to those wishing to rent before deciding in what location to buy. The variety of options and the coverage of the entire region make this an excellent way to get a foot in the door, ensure compliance with the immigration requirements, and guarantee stability and a confirmed place, not likely to be cancelled by a more profitable Airbnb booking or a sudden surge of 2021 summer bookings.
With the difficult 2020 rental market, owners have shown greater flexibility and some clients have even managed to obtain a start date immediately before or during the summer, something that in a “normal” year would be seen as too risky by most owners.
Those looking for accommodation will find more competitive prices in the large cities, but areas where supply of long-term accommodation is very tight, like the Algarve, means prices remain unchanged. Planning is absolutely crucial for those wishing to have a smooth transition between their country of origin and their new home. Look too far ahead and no owner or agent will be interested. Few will engage. Start too late and expect to pay an exorbitant premium, have to be very flexible on your requirements or expect to be ignored as you jump from one Facebook group to another, posting ever-more desperate please of help.
While the challenges of current times are many, future planning is crucial to ensure that those looking to retire or invest in Portugal are able to access the best solutions, at the right time. Distance alone, and the inability to travel immediately, should not prevent plans and visions from becoming reality.