usLuxury properties and villas are generally marketed as unfurnished, although it’s common practice for the buyer to make an offer for all or part of the furniture. Another advantage of buying a resale property is that you can see exactly what you will get for your money and will save on the cost of installing water and electricity meters and telephone lines, or extending these services to a property.
When buying a resale property in a development, it’s best to ask the neighbours about any problems, community fees, planned developments and anything else that may affect your enjoyment of the property. Most residents are usually happy to tell you, unless of course they’re trying to sell you their own property!
If you want a property with abundant charm and character, a building for renovation or conversion, outbuildings, or a large plot of land, then you must usually buy an old property. Note, however, that there’s a relatively small market for old country homes such as farmhouses in Portugal, particularly inexpensive properties requiring renovation.
Most old homes purchased by foreigners are in the hinterland of the Algarve, although houses for renovation for a reasonable asking price are becoming more difficult to find and you may need to look further afield. In many rural areas (including villages close to the coast), it’s possible to buy old properties from around €50,000 (although the asking prices are sometimes ridiculous), but you will need to carry out major renovation and modernisation which may well double or treble the price.
Many old homes lack basic services such as electricity, a reliable water supply and sanitation. Because the purchase price is often low, many foreign buyers are lulled into a false sense of security and believe they’re getting a wonderful bargain, without fully investigating the renovation costs.
If you aren’t into do-it-yourself in a big way, you may be better off buying a new or recently built property, as the cost of restoration can be prohibitively expensive. If you’re planning to buy a property that needs restoration or renovation and you won’t be doing the work yourself, obtain an accurate estimate of the costs before signing a contract. You should consider having a survey done on a resale property, as major problems can be found even in relatively new homes.
Bear in mind that if you buy and restore a property with the intention of selling it for a profit, you must take into account not only the initial price and the restoration costs, but also the fees and taxes included in the purchase, plus capital gains tax if it’s a second home. It’s often difficult to sell an old renovated property at a higher than average market price, irrespective of its added value. The Portuguese have little interest in old restored properties, which is an important point if you need to sell an old home quickly in an area that isn’t popular with foreign buyers. If you’re buying for investment, you’re usually better off buying a new home.
Owners often advertise their property directly in the Portuguese and expatriate press in Portugal or by simply putting a for-sale ( vende-se) sign in the window. Although you can save money by buying direct from an owner, particularly when he’s forced to sell, you should employ a lawyer to carry out the necessary checks. If you’re unsure of the value of a property, you should obtain a professional valuation.
This article is an extract from Buying a Home in Portugal. Click here to get a copy now.