Buying a property offers security and the possibility of appreciation over time.

1. What are the advantages and disadvantages of buying a property?
In Portugal, buying a home has always been considered a life goal. The option to buy may be the most suitable for individuals or families who wish to invest in the medium to long term, or who wish to acquire assets to invest their savings.

1.1 Advantages
Compared to renting, buying a property has a number of advantages:
  1. Investment in an asset with potential for appreciation that will become part of your own assets;
  2. Possibility of exemption from certain taxes, such as IMT (property transfer tax) or Stamp Duty, applicable to young people under 35;
  3. Freedom to adapt the house and carry out renovations;
  4. Possibility of becoming a source of income if you decide to rent or sell.
 
1.2 Disadvantages
Among the main disadvantages associated with buying a property are:
  1. The large financial investment required, especially at the beginning of the process (down payment, commissions, among others);
  2. Fixed and variable costs: property maintenance, condominium fees, renovations, insurance, and taxes (such as IMI and IMT);
  3. The need to have equity for the down payment, which, as a general rule, is no longer 100% (except in cases covered by the State's public guarantee, a measure aimed at young people up to 35 years of age).
 
2. Buying a house to rent
If you are considering buying a house to rent, consider the following questions:
  1. Carefully consider the location of the property. This factor can be decisive in making your investment profitable.
  2. Your income must exceed your costs. Assess all costs associated with the purchase of the property, including IMT (property transfer tax), IMI (property tax), insurance, condominium fees, any construction work, and maintenance expenses.
  3. Calculate how long it will take to recoup your investment. Divide the purchase price of the property by the total rent you expect to receive over 12 months. A ratio of less than 15 indicates that you are looking at a good deal. If it is higher than 20, it is not advisable to proceed with the purchase.

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Source: https://www.cgd.pt/
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