Own in Beach Town Portugal For Just $166,000
By Ronan McMahon

It's October on Portugal's Algarve and you've just stepped out of your condo for a stroll to the marina. A pleasant breeze greets you. With the temperature a perfect 71 F, you plan to stop at an outdoor café.

The marina is just five minutes' walk from your place. Or, you could stroll down to the historic center, stopping to admire the brilliant blue and white buildings and mighty medieval walls.

In fact, with a climate this mild you could stretch your legs further and head to one of the golden-sand beaches dotted around this historic town.

Lagos, in the western Algarve, is surrounded by beaches.

Your condo's location is absolutely ideal. It's perfect when you want to spend time here. And visitors will pay you up to $1,480 a week to stay. On the roof of the four-story building is an immaculate shared pool and good views of the ocean.

With the surging rental market here, I figure your condo could throw off a gross yield of nearly 12% a year. And in five years I expect its value to be around €90,000 more than you'd pay...

The best deals like this come and go fast on the Western Algarve. But there is plenty of opportunity if you are ready to act...

First, some context...

Offering 300 days of sunshine a year, breathtaking beaches, and first-rate golf, Portugal's Algarve attracts millions of tourists each year. It's in the south of the country facing the Atlantic, although it boasts a Mediterranean climate. It's a place of culture, great food, and welcoming locals.

For years Portugal was fairly unknown. The Algarve was the only part of the country that drew a lot of tourists. Those were mostly British and other northern Europeans. I visited often—the Algarve is a favorite place of mine and one reason I keep going back is I'm personally looking for property there.

I'm not alone...not anymore.

The number of tourists visiting Portugal has broken records eight years in a row.

Portugal is one of the hottest trends in travel these days. Tourism in Portugal has been on a tear for most of a decade. Last year was another record-breaker. Portugal saw a whopping 24 million tourists. And the Algarve alone had a record-breaking 20 million overnight stays.

North Americans and Canadians have discovered Portugal. It's no longer the “best-kept” secret in Western Europe. Getting to Portugal is easier, too. In 2019, Portugal's national airline, TAP, launched new direct routes to Chicago and Washington DC. They already offer flights to New York, Boston, L.A., Miami, Toronto, and Montreal, and they plan more in the near future.

Since 2012 the country has become a safe haven for international investors lured by the Golden Visa and the promise of a safe place to park their money. A minimum investment of €350,000 in real estate could get you the visa, which opens up visa-free travel throughout Europe's Schengen Zone.

That's just one of the reasons Portugal topped International Living's 2020 Retirement Index.

Not only is it easy to gain residence, it's one of the safest countries in the world. Portugal came third in 2019's Global Peace Index. It definitely feels overwhelming peaceful, safe, and easy going. In fact, safety is high on the list for the growing number of expats you meet there. They also talk about the low cost of living, mild climate, culture, history, and the ease of getting around the rest of Europe.

I've been visiting the Algarve since 2002, and this southern stretch of coast has delivered some incredible deals to members of Real Estate Trend Alert.

For instance, in one deal I uncovered in the historic town of Lagos, which I mentioned above, I believe we will see strong appreciation—around €90,000 in five years. I reckon it could command an annual rental income of nearly €25,000.

It was priced at €210,000 in a four-story building with a shared pool—a property that will easily top the listings on websites like Airbnb if you market it right. In five years, I expect this condo to be worth €300,000.

Monthly payments, even on a condo like this, will blow your mind. Banks in Portugal are hungry to do business, and even foreign investors like us can get mortgages of 80% LTV, at rates as low as 1.5%. That's something that's hard to find anywhere else, where foreign investors usually can't access bank finance.

You could borrow 80% LTV at 1.5% and your repayments would be €663 a month for a 30-year mortgage.

In the eastern Algarve, near the historic town of Tavira, I've uncovered a deal where the numbers look even sweeter. Borrowing 80% LTV on a €149,000 condo, you'd be into the deal for just €29,800, plus buying costs. And with a rate of 1.5%, your repayments are just €575.

These condos are already built, ready to move into, and ideally placed for rental income. You can learn more about the opportunity here.

I'm struck by the parallels with opportunities I have discovered on Mexico's Riviera Maya. Just as a Path of Progress has driven profits there, it's doing so on the Algarve. In both places the whole spectrum of tourism markets is catered for—from mass-market through to upmarket and boutique.

The short-term rental market in the Algarve is anchored by a red-hot, 10-week peak season. You can add the two weeks at Easter and schools' (in northern Europe) spring and fall breaks. (The Algarve is very popular as a family destination.) May and September are good months to rent to golfers, young couples, and retirees. Figure, all told, on 10 weeks of peak rentals and then 10 weeks scattered through the rest of the year at an off-season rate. And the season is getting longer as Portugal's tourism sector booms. Plus, Scandinavians are coming in increasing numbers in the off season to escape their winter.

But there's another reason why the Algarve is becoming a unique investment opportunity. Recently, the Portuguese government started talking about adding new restrictions to the Golden Visa, which would exclude property in Lisbon and Porto from eligibility. If this happens, we could see a rise in the number of expats looking to buy in the Algarve.

But the deals go fast these days. You have to be swift...