Lisbon: One of the Most Profitable European Capitals to Buy-to-Rent

Lisbon ranks as the sixth European capital where it is most profitable to purchase a house to put on the rental market, according to the Global Property Guide. 

Lisbon: Sixth Most Profitable European City to Buy to Rent

Taking into account 32 European countries, the Global Property Guide ranked Lisbon as the sixth European capital where it is the most profitable to buy a property in the country to put on the rental market.

According to the report, the gross profitability of housing rentals in Lisbon stood at 5.65 percent at the end of June this year in 2024. Rental yields in the third quarter of 203 in Lisbon were 5.2 percent in the capital and 6.7 percent in the Lisbon Metropolitan Area, highlighting the stability in rental yields between 2023 and this year.

In contrast to Lisbon’s profitability of 5.65 percent at the end of June 2024, only Dublin (7.33 percent), Rome (6.82 percent), Riga (6.46 percent), Bucharest (6.3 percent), and Podgorica (5.7) ranked higher than Lisbon.

Other Profitable Portuguese Cities

The same study also highlighted several other cities where buying property in Portugal could be a profitable move. Setúbal, less than an hour south of Lisbon, has an average profitability of 6.51 percent when investing in a house to rent. This is higher than Lisbon and also higher than Porto, the country’s second-largest city, in addition to Faro, Aveiro, and Braga, which all had average profitability of over 5 percent buy below Lisbon. 

Why is Portugal a standout location for investors?

Portugal has become a cornerstone of the European real estate market in recent years, attracting property investors, families, young professionals, and retirees at an increasing rate over the last decade.

Increasingly, there has also been an increase in interest in luxury properties in Portugal, with both the Algarve and Porto being featured in the Wealth Report by Knight Frank, as being two of the top ten fastest growing real estate markets in 2023.

Alongside strong rental yields and a robust property market, less restrictions on short-term rentals and the continued influx of tourists to the country continue to make Portugal top the list for many investors seeking a profitable investment in Southern Europe.