Is buying a vacation home worth it?

Yes? No? Maybe? It is difficult to answer precisely, because for some families buying a vacation home pays off, but for others it doesn't! Although an apartment or villa always contributes to increased wealth, and the real estate market in Portugal is recovering after the pandemic, before you make a decision, know the advantages and disadvantages of buying a vacation home!

Benefits of buying a vacation home

Whether to fulfill the dream of owning a house on the beach, or to find a quiet place to escape from the daily stress of the city on weekends, many people consider investing in a second home. If you are part of this group, learn about the main benefits of buying a vacation home!

• ​You can enjoy the vacation home at any time of the year, which means you have the opportunity to take getaways whenever you want;
• You always have a place to relax and enjoy a few quiet days with family or friends;
• You can customize the house to your liking and adapt it to your needs, unlike the properties you usually rent during your vacations;
• You have the chance to find a property inserted in a development with leisure areas, such as swimming pool and garden, and even with maintenance and convenience services;
• Makes the vacation home profitable, if you so wish, by renting it during the periods when you do not intend to use it and thus obtaining a good extra income... or at least, not falling into financial loss!
• And finally, a vacation home can also be an excellent investment, either because you want to buy under the Golden Visa and obtain Portuguese citizenship, or because you want to increase your family's wealth. After all, whether it's a two-room apartment or a villa with a swimming pool, a property is always a property, and if it's in a beautiful area, it increases in value over time and brings a good financial return.

Disadvantages of buying a vacation home

Considering that buying a property implies a considerable investment, it’s better to put the disadvantages of buying a vacation home on the other side of the scale, isn't it?

• ​If you have no equity, the big disadvantage may be the financing that will add some weight to your personal finances;
• Even if you don't have to resort to a bank loan, you won't be free of worries and expenses with the maintenance of the house and payment of taxes and insurance, among other costs;
  
• Another disadvantage is that you no longer have the opportunity to vary and rent a vacation home somewhere different every year;
• Then, you may even have the intention of increasing the value of the property by doing short-term rentals during the periods when you are not using it, but this implies some available time and an extra dose of patience to deal with all the bureaucracies related to renting: placing ads on the Internet, answering users, receiving guests, dealing with cleaning... and being available 24 hours a day, 7 days a week, in case the guests have any problems!

So... does buying a vacation home pay off?

It depends on the usage. Is it enough to compensate for the investment? How many days a year will you spend in your vacation home? Do you intend to move there after retirement? If you will use the house long enough to compensate for the investment, great. If not, it's worth investing in occasional stays in local hotels or lodging, isn't it?
However, utilization is not the only variable in making a decision. Although no one can guarantee that buying a second home will pay off, the truth is that there are clear indications that you will get a return on your investment, such as the price of the property. In other words, if you bought it at the market price or even below the market price, congratulations! You will get a return, especially if you are the kind of person who is not afraid to take risks and can even find investments with a higher appreciation potential... or the kind of person who is willing to make the property profitable by renting it for a short period of time.
Is it worth buying a vacation home? In the end the decision is yours, but you should only make it after analyzing these and other variables, including your lifestyle and economic situation. Then you can make the right decision!

How to make a vacation home profitable?

Have you decided to buy a vacation home, but want to know how to make it profitable? It's simple! Renting! A second home that is closed for most of the year can be made profitable with short term rentals to national and foreign tourists, particularly if it is located in a touristic area with plenty of attractions, such as the Algarve. Even so, remember that the return throughout the year may not be constant and, also remember that transforming a vacation home into a short term rental property brings higher operational costs than the long term rental costs, taking into account that there is a higher turnover of guests.

Where to buy a vacation home?

The Algarve continues to be one of the preferred vacation destinations for Portuguese families to buy a second home and is also preferred by foreign citizens who decide to live in Portugal.

Although there are other areas of tourist interest in the country, the truth is that the Algarve is an excellent option for real estate investment due to its location, mild climate, beaches, infrastructure, entertainment, culture, accessibility and other amenities that attract vacationers, like honey attracts bees!

Therefore, whether it is for vacationing or for living, you will hardly regret buying a house in the Algarve. Even because the real estate market in the Algarve region performed very well from 2021 to 2022: on average, houses increased in value by 10.3%, while the average in the rest of the country did not exceed 5.6%, according to the Idealista website.

Where to buy a vacation home in Algarve?

All the Algarve region is made of sun and sea, but we can highlight Portimão as one of the best places to buy a vacation home, as it has paradisiacal beaches, culture, sports, commerce, services, gastronomy... everything it needs to be considered one of the best Portuguese cities to spend some fantastic days!

How to find vacation homes in Portimão?