Is it worth buying a house to rent?
What does the concept of leasing mean? Does it differ from renting? And is it worth buying a house to rent out? We answer all these questions in this article.
If you have any doubts about the process of buying a house for renting, the credit intermediaries from Poupança no Minuto can help you for free. Our support is personalized, clear, and without costs, and it can make all the difference when deciding.
What does renting a house mean?
To lease refers to a type of rental contract related to real estate, such as an apartment or a store, as can be read in a publication by Notícias ao Minuto.
When the contract has as its object an immovable thing, it is called a lease, which is the contract by which one party (the landlord) undertakes to provide the other (tenant) with the temporary enjoyment of an immovable thing, in exchange for monetary consideration, usually periodic (rent), explains the information platform.
What is the difference between leasing and renting?
But many confuse the term lease with rent. Both are legal concepts, but unlike leasing which refers to real estate, renting refers to movable articles.
It is possible to rent temporarily objects like a car or various equipment, but not a property. According to Notícias ao Minuto, renting "is a contract by which one of the parties undertakes to provide the other with the temporary enjoyment of a movable thing, in exchange for a fee".
How much does it yield to buy a rental house?
Renting a house typically serves the purpose of housing. However, it can also be seen as an investment opportunity. Does buying a house and renting it out outweigh the costs of acquisition and taxes?
The numbers do not lie and demonstrate that yes: According to Notícias ao Minuto publication, "buying a house and putting it up for rent yielded 7.5% in the third quarter, with profitability increasing in the last year".
According to a statement accessed by Notícias ao Minuto, in Portugal, the gross profitability of buying a house "to put it on the rental market was 7.4% in the third quarter of 2023, 1.4 percentage points (pp) higher than that calculated for the same period in 2022 (5.9%)".
What it means is that profitability in housing was 1.6 percentage points higher compared to the second quarter of 2021, equivalent to 5.7%.
Rental profitability by zones
And in which area of the country does it make the most sense to buy a house for rental investment? The data indicates Santarém.
"Analyzing by district capitals, it is in Santarém where it is most profitable to buy a house for investment, with a return of around 7.9%." Next, according to data provided by Notícias ao Minuto, the city of Évora has 7.5%, Leiria 7%, Coimbra 6.5%, Braga 6.3%, Aveiro 6.2%, Setúbal 5.8%, and Porto 5.8%.
Where there is not as much profitability: in Lisbon with 4.7%, Faro with 5%, Viana do Castelo with 5.1%, Funchal with 5.5%, and Viseu with 5.5%.
Buy a house to rent? Ask for help from a credit intermediary.
Are you considering moving forward with one of these assets and investing in the real estate market? According to the data, it might be a good time for this investment. You can do it, even by buying property to rent through a housing loan.
Consult a credit intermediary to clarify all your possible doubts, and have access to free and personalized support throughout the entire process of buying a house with financing.
The intermediaries of Poupança no Minuto are available to help you at all stages: Contact us and let's move forward with the profitability of your finances!