Lisbon 2-bed at €993,600 with €2,682 monthly rent: does the yield justify it?

[SmallChart]

I have checked the basic rent calculation, but the ownership costs and realistic tenant turnover are still unclear. The Lisbon new-build is a two-bed at €993,600 with projected rent of €2,682 a month, giving a headline gross yield near 3.2%. Allowing for one empty month reduces that to just under 3% before any bills.

The spreadsheet already allows for management, routine upkeep, insurance, vacancy and a reserve for larger jobs. I still need better evidence for condominium charges, achievable rent and likely gaps between tenants, while possible rental-rule changes add another uncertainty. Which actual building or letting records would you request before accepting the rent forecast, and at what net return would this price begin to make sense?

 

[SmallChart]

One clarification: I’m trying to judge the property on an unlevered basis first, then test financing separately. I also don’t have reliable days-on-market information yet. If the flat or comparable rentals have been sitting for a while, the quoted rent deserves a bigger haircut than my one-month vacancy allowance.

 

[kit_surveys]

Eleven months gives €29,502 annual rent, or roughly 2.97% before management, maintenance, insurance, property tax and condominium charges. I would focus on the last item: obtain the actual building budget and find out what the flat’s share will be rather than accepting a broad estimate. Acquisition costs should also be included when calculating return on total cash invested.

 

[anika_valuations]

Is €2,682 based on signed leases for genuinely comparable 2-beds, or just current asking rents? Also, is the assumption furnished or unfurnished and who pays utilities? Those details affect turnover costs and vacancy. I’d ask for the listing history for both the sale and rental comparables, including price reductions, rather than relying on a single days-on-market figure.

 

[bo_keys]

I’m less concerned about whether the repair reserve is slightly light than about the basic price-to-rent relationship. There is not much income available to absorb errors once gross yield starts near 3.2%. New-build status may reduce some early repairs, but it does not remove management, common-area costs, insurance, tax or tenant turnover.

Personally, I would want something around 4% net for this type of rental risk. That hurdle may simply be incompatible with this purchase price, which is useful information rather than a reason to make the rent forecast more optimistic.

 

[kit_surveys]

I agree that the quoted rent needs stronger evidence, though I wouldn’t impose one universal 4% target. A buyer prioritising capital preservation may accept less; a financed buyer exposed to rate changes may need more. The useful comparison is downside cash flow: lower rent, a longer void, higher condominium charges and no permitted rent growth. If one plausible combination turns cash flow negative, the margin is too thin.

 

[followTheBeam]

I’d turn this into a short request list before deciding: comparable signed rents and their marketing periods, the condominium budget and recent meeting records, property-tax and insurance estimates, management terms, and the exact assumptions behind the €2,682 figure. Have a Portugal-based adviser confirm the current rental and tax treatment for your ownership circumstances.

Then calculate the maximum purchase price that meets your chosen net yield, including acquisition costs. If that value is far below €993,600, financing tweaks or a lighter repair reserve will not rescue the underlying deal.