Buying vs Renting Property in Lagos, Portugal: What’s Right for You?

Lagos, Portugal, is one of the Algarve’s gems and has cemented itself as a favourite for those looking to relocate. However, the decision to purchase or rent is equally as prominent in those considering the move here. In this week’s blog, we break down the pros and cons of each option to help you make an informed choice.

Renting a Property in Lagos, Portugal

Advantages of Renting

1.    Flexibility

Renting is a great choice if you’re not ready to commit to a long-term investment. It’s perfect for those still exploring different areas such as Porto de Mós or Meia Praia.

2.    Lower Upfront Costs

Renting typically requires only a security deposit and the first month’s rent, making it far more affordable than buying a property.

3.    Low Maintenance Responsibility

Landlords or property management companies handle repairs and upkeep, saving you time and money.

Drawbacks of Renting

1.    No Ownership Benefits

Renting doesn’t offer long-term financial returns or the pride of ownership.

2.    Increasing Rent Costs

The demand for rentals in Lagos is high, especially during the summer months, which can drive up prices.

3.    Limited Control

You may not be able to make changes to the property to suit your preferences.

Buying a Property in Lagos, Portugal

Advantages of Buying

1.    Investment Potential

The Algarve is one of Europe’s most sought-after locations, with property values in Lagos steadily appreciating over the years. You could enjoy a solid return on investment.

2.    Residency Benefits

While the Golden Visa programme no longer applies to residential properties, buying a home in Lagos can still support residency applications through other means such as the D-class visas. 

3.    Stability

Owning property offers peace of mind, especially for families or retirees planning to settle down permanently.

    4.    Rental Income

If you’re buying a second home, short-term rentals in Lagos during tourist season can provide a lucrative income.

Drawbacks of Buying

1.    High Upfront Costs

Beyond the purchase price, you’ll need to account for taxes (IMT), notary fees and legal costs, which can add up to 8–10% of the property value.

2.    Maintenance Costs

Homeownership comes with the responsibility of maintaining the property and paying for repairs.

3.    Market Fluctuations

While the Lagos property market is generally stable, economic changes can impact property values.

Key Market Insights

    •    According to market data, Lagos property prices average €4,400–€5,000 per square meter, depending on the location and property type (e.g., beachfront vs. inland) (Properstar).

    •    Rentals range between €1,500–€2,500 per month for long-term leases, while short-term Airbnb rentals can fetch €150–€300 per night during peak tourist season.

    •    The Algarve remains a top spot for foreign buyers, particularly British, German and French investors, thanks to its favourable climate, safety and tax benefits.

Conclusion

Deciding between buying and renting in Lagos ultimately depends on your lifestyle, financial goals and long-term plans. Renting offers flexibility and lower short-term costs, while buying provides stability and the potential for long-term financial gains.

At B&P Real Estate, we specialise in helping you find the perfect property. Get in touch with us today to explore your options.