Let’s take a look over Tourist Developments Investments in Portugal for a change.
The topic of real estate investment in the tourism sector is extensive and requires some attention from those interested in this investment avenue.
In broad terms, Tourist Developments in Portugal are classified into categories defined by the Legal Regime for Tourist Developments (RJET), and they are as follows:
- Hotel Establishments
- Hotels from 1 to 5 stars
- Hotel-Apartments from 1 to 5 stars
- Pousada
- Tourist Villages from 3 to 5 stars
- Tourist Apartments
- Tourist Complexes
- Tourism Housing Developments
- Rural Tourism Developments or Country Houses
- Agrotourism
- Rural Hotels from 3 to 5 stars
- Camping or Caravan Parks
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Just from this list, it’s evident that this is a diverse world to explore, given the variety provided by the law.
Various national and international tourism operators and promoters are exploring these opportunities for both national and international real estate investors. Why? Because many investors prefer not to be directly involved in the management of their investment; they want accountability. Let’s briefly look at this type of investment and see what you can expect from it.
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Advantages
- You acquire a property with a tourist license, ready for short-term and/or long-term rentals from day one. You are not left adrift in the world of licenses for personal and permanent housing use.
- Generally, properties are sold fully furnished and equipped according to the requirements chosen by the company holding the tourist exploitation license.
- When purchased new, the real estate developer and/or tourism promoter usually guarantee a Return on Investment in the first years, assuming the property is available for tourist accommodation during that period.
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Disadvantages
- You will always be bound by the Constitutive Title of Tourist Development, and it is essential to be familiar with the rights and obligations contained in it, as they may, for exemple, limit usage or the ability to furnish the property to your liking.
- As a tourist development, condominium costs are generally higher than usual. Confirm which costs are borne directly by you and by the Condominium of the Development.
- The major limitation generally imposed is that you cannot manage rentals on your own; you must always give the exploitation to the promoting company defined.
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Tourist Investments Summary
- It is always a reasonable choice when you don’t want to spend long periods in the development and want to ensure that the property remains in good condition.
- Tourism exploitation agreements are renewed at predetermined intervals, so you can always decide to use the property as you please throughout the year and stop putting it into tourist exploitation. However, be aware that you also cannot rent it out independently.
- Whenever you have a Guaranteed Return on Investment, do the math; it can be a good choice.
- Also, pay attention to any tax benefits in effect.
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Happy researching and wise choices.
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Isabel Romano | + 351 933263788 | AMI 7543 | hello@lemontreehomes.pt
www.lemontreehomes.pt/properties
https://www.youtube.com/channel/UCiWsCzwXe4PK2IdEMfgcE9A
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