Our sister site over at RHJ Law have recently written an article discussing the key points to consider when it comes to short-term rental property in Portugal. They cover the legal aspects, potential tax implications, and how to maximise your return on investment. By the end, you’ll have a better understanding of the ins and outs of short-term property rental in Portugal.
If you would like to read more from RHJ Law, click here
Do your research
If you are considering renting out a short-term rental property in Portugal, then it is important that you do your research. It is important to have a good understanding of the local market and the potential risks associated with renting out your property. Consider factors such as local demand, the average rental price for similar properties, the legal requirements for renting out your property, and the best way to advertise your listing. The more information you have, the more prepared you can be when making decisions about renting out your property.
Additionally, researching the legalities of renting out your property in Portugal will help ensure that you are compliant with local laws. If your not sure if you are within your right to rent out your property then why not contact us and we can help you to get started.
Consider the type of property
When renting property in Portugal for short term rentals, you need to be sure that the type of property you are investing in is suitable for this purpose. For example, it should be ideally located close to amenities and attractions to attract potential guests. It should also be within a reasonable distance from transport links and airports, as people are more likely to book if they can get to their destination easily.
Also, you need to make sure that your property is equipped with modern amenities to meet the expectations of short term rental guests. If you choose to rent out the property through Air BnB, they provide helpful information on the types of properties that do well on the platform, so it’s worth researching this before investing in any property.
Finally, think about the layout and space – will it accommodate the number of guests you hope to attract? Will it provide enough space for them to be comfortable? All these considerations will ensure that you invest in a property that is suitable for renting out on a short term basis.
Know your guests
When renting out a short-term rental property in Portugal, it’s important to be aware of the type of guests you will be hosting. There are a variety of different reasons people look for short-term rentals in Portugal, such as visiting family or friends, attending a conference, exploring the country as tourists, or relocating for work.
By getting to know your potential guests and understanding their needs and motivations for renting your property, you can provide them with a great experience during their stay in Portugal. Before renting out your property, be sure to ask guests questions about their travel plans and the purpose of their visit. This will help you determine if they are the right fit for your rental. It is also important to check references and other sources to ensure that they are reliable and trustworthy. You will commonly find the disclaimer “no hen/ stag parties or similar” on Air BnB properties
By being aware of who will be renting your property, you can provide them with a pleasant experience while also protecting yourself from any potential risks associated with renting out a short-term rental property in Portugal.
Don’t overprice your rental
When it comes to renting a short-term rental property in Portugal, one of the biggest mistakes you can make is to overprice your property. You want to attract guests who will pay the fair market value and not scare them away with an overly expensive price tag. That being said, you also don’t want to undervalue the property and leave money on the table.
When pricing your property for rent in Portugal, do some research and determine what other similar properties are renting for in the area. This will help you to set a fair price for your rental that won’t turn away potential guests. Additionally, consider the amenities and extra features that you offer to make sure you are getting the most out of your rental income.
At the end of the day, if you price your rental too high, you may miss out on the opportunity to make some extra money while renting in Portugal. However, if you price it too low, you may end up regretting it down the road when you could have made more. Striking the right balance between attracting guests and making money is key to successful short-term property rentals in Portugal.
Offer something unique
When renting out your property in Portugal for short-term rental, it is important to offer something that will set you apart from other rental properties in the area. You want to make sure your property stands out and entices potential guests. Consider offering amenities such as a pool, a hot tub, or even access to an outdoor grill. You can also offer extras like discounts on local attractions, activities, and transportation.
Additionally, look into adding features that will make your guests feel at home such as high-quality bedding, home-cooked meals, or even custom artwork. These touches can help make your rental more attractive and increase the chances of bookings.
Keep your calendar up to date
Staying on top of your short term rental property calendar is key to maximising the income you generate from renting in Portugal. It’s important to keep your calendar updated with availability so potential guests can easily find your listing. It’s also a good idea to make sure your availability is accurate and up-to-date. This will reduce the chances of any misunderstandings or disputes when it comes to scheduling bookings. If you fail to update your calendar regularly, you may miss out on potential bookings.
Furthermore, setting up automated messages to guests will help keep them informed of any changes in availability or updated information. This will ensure that your guests know exactly when they can check-in and check-out. Additionally, having a clear understanding of the check-in and check-out times can help avoid conflicts and make sure that your guests have a pleasant stay. Keeping your calendar up to date should be part of your regular routine when renting out property in Portugal.
Finally, it is important to answer messages quickly. It is likely that potential guests are looking at multiple properties at once. If you do not respond within good time the guest will likely find somewhere else. On apps such as Air BnB and Booking.com it is possible to turn on your message notifications so you never miss an enquiry.
Managing your taxes
When renting out a property in Portugal, whether for a short term or longer period of time, you will need to ensure that you are correctly managing your taxes. Depending on your situation and the type of rental, there are a few different tax implications to consider.
If you are renting out a property on a short term basis, you will be liable for Income Tax (IRS) and Non-Habitual Resident Tax (NHR). The IRS applies to all income earned in Portugal and is charged at progressive rates depending on how much income you make. The NHR applies to any rental income that is not subject to Portuguese Social Security, and is set at a flat rate of 20%.
If you are renting your property on a longer-term basis then you will be liable for Local Property Taxes (IMI) which are based on the rental value of the property. Additionally, all rental income is subject to Portuguese Social Security, with the employer and employee both paying contributions.
Renting property in Portugal can be an extremely rewarding experience. However, it’s important to make sure that you are aware of your obligations when it comes to taxation and to ensure that you are meeting all of your legal requirements. As always, if you’re unsure about anything related to renting your property in Portugal, contact us. We have helped plenty of clients to open multiple successful ‘short term rental properties’ in Portugal.
Speak to an expert
Renting a short term property in Portugal is a great way to increase your income, but it does require some research and planning. Consider the type of property you want to rent, who your guests are likely to be and make sure to price it competitively. You should also offer something unique that makes your rental stand out from the competition.
Finally, be aware of any taxes or other legal requirements that may apply when renting in Portugal. If you’re willing to put in the work and have an eye for detail, renting property in Portugal can be an incredibly rewarding experience. If you are unsure where to start why not speak to us to get started!