Portugal Property

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Portugal Property: Renovating a Property in Portugal

Date: 16/10/2008

And what about combining all of these ideas and buying a renovation property in Portugal, perhaps at auction?  Move away from the popular Algarve region and Portugal is still among the most competitively priced country in Western Europe for property.  Heading off the beaten track and looking at properties other than new builds will reap you substantial dividends in terms of what you actually get for your money too.

If you’d like to live abroad or use a property abroad as a way onto the housing ladder in the UK or as an investment for the future, in this article we’ll take a good look at renovating a property in Portugal where demand remains high for attractive homes, where the legal system is secure so you shouldn’t get ripped off (!), and where you can still find affordably priced skilled labour.

Like many nationalities, the Portuguese like modern, clean and new when it comes to a property!  Therefore if you’re after a renovation project you shouldn’t face too much local competition!  This can also mean you can negotiate prices down and be quite ruthless when it comes to securing a deal.  Remember, on a project such as the one you’re thinking of taking on, a lot of the deal making that will secure you your ultimate profit has to be done in negotiations with the vendor and then with any builders and contractors you get in to do the work.

When looking for a profitable project you need to know that massive structural work won’t necessarily reap you back want you lay out in terms of building costs when it comes to adding value to the home – at least not in the short term.  So, think about your approach to a project, how you’re hoping to make money from it, and let this drive the type of property you take on.  If you want to make a relatively fast buck, look at a property that just needs cosmetic work…but if you’re in it for the long haul or renovating is a labour of love for you, by all means look at taking on something altogether more ambitious.

The next most important thing to mention is learning to speak Portuguese, because if you’re going to be living in Portugal and getting your hands dirty with your renovation project, you’re going to need to speak a good degree of Portuguese to deal with everyone from the architect to the building supplies merchant.  The bad news is that Portuguese is notoriously difficult to learn, the good news is that there is nothing like a baptism of fire in terms of having to pick up a language when you are totally immersed in it every day.

As with a building project back home, get plenty of architects and builders to quote for the job and make sure their quotation is broken down so you can see where the money is going and ensure that they have factored in every element of the job – from electrics to plumbing to decorating and also the level of finish they will be completing the property to.  Because you will be operating in a foreign country and have maybe never taken on a renovation project before, you might like to seriously think about getting a project manager in to oversee the job.  Whilst this can add about another 10% to the overall job, it can save you hassle and time.

And finally, here are our top ten tips to consider when renovating a property in Portugal:

1) One of the most expensive elements of a renovation project that people fail to budget properly for in Portugal is the roof.  When looking for suitable projects, try and find one where the roof is intact and this will not only save you money on re-roofing costs, but it should hopefully mean that the property has not suffered from water penetrative damage either.
2) You can insist that your purchase contract is conditional to you getting the planning permission you want to renovate the home in question.  Because renovation real estate is not big business in Portugal, particularly in the current global economic climate, you can be relatively assured that most vendors will accept such a condition.
3) Remember you will need to get a building license from the local authorities before major work commences.
4) Not many older properties in Portugal have damp-proofing, and even modern built homes often skip this – think about whether you will want to include it in your renovation, it can be costly to add at a later date but it may also be worth it.
5) Don’t overlook the fact that a property you fancy buying may not be connected to even the most basic utilities.  Ensure that there is water and electric to the site before you buy – otherwise you’ll be in for a huge bill and lots of red tape and delays.  Also find out if you can get gas and telephone lines.
6) Examine the state of the plumbing before you agree to buy – lots of older properties have steel or even iron pipes which are interesting at best!  But which cost a lot to replace – and they have to be replaced to meet modern standards and also because they tend to corrode and/or leak.
7) When drawing up a contract with a builder, sign them in to start and finish dates with penalties for missed deadlines – you can even offer a bonus payment if work is finished early if you really want to ‘incentivise’ a builder!
8) You may well be looking for your renovation project in the Spring and Summer months when there is a lot less rainfall in Portugal, so you may overlook the fact that it is built next to a brook or ravine perhaps…but you mustn’t because a babbling brook can turn into a raging torrent of water in the winter months and ravines are there to funnel water from mountains!  Think about whether your home is therefore at future risk of flooding…if it is, don’t buy it!  And if you think the property is safe, just ensure that all electrics and the supply of electrics are above any established floodlines…don’t take the risk, it’s not worth it.
9) If you purchase a character property with interesting original features, you will need to budget for a skilled craftsman to repair or replace any of these features.
10) Finally, timber is often delivered for use untreated as standard – don’t fall for this one!  You will need timber treated against damp so check the type of timber you’re buying, and if it needs treating you’ll have to budget for it.

Buying a property to renovate in a stunning and desirable nation like Portugal can be so well worth the hassle!  You’ll find the process is at times stressful but it will also be hugely rewarding if you take it seriously from the outset and tread carefully with your budget.  What’s more, ruined homes and run down real estate in Portugal are far more affordable in real terms than completed, new or off plan homes…so you can end up getting a lot more for your money. Source: Shelteroffshore

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