Lisbon rental deal: €1,306,000 purchase and €8,633/month rent

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€8,633 a month is the figure that makes this look attractive, but it is also the assumption I trust least. The asking price for the five-bed new-build flat in Lisbon is €1,306,000, so the rent implies a gross return of about 7.9%.

I have allowed for empty periods, agent involvement, ordinary upkeep and a separate reserve for larger work. Insurance, energy performance and building costs could still change the result substantially. I have not yet settled whether the flat would be let under one tenancy or in a format involving more turnover.

For those familiar with Lisbon numbers, which recurring costs deserve their own line rather than a broad allowance? I am particularly interested in management, property tax and the cost of replacing tenants. At what point would the return no longer compensate for the work and concentration risk?
 
The gross calculation works, but I would focus on recurring building charges, property tax and a firm insurance quote rather than treating them as minor deductions. Also, how is the €8,633 achieved: one tenancy, several tenants, and with or without utilities? That answer changes management effort, turnover and the relevance of energy costs.
 
I think the rent assumption is the bigger risk than maintenance. A 5-bed may show strong demand, but €8,633 needs to be supported across ordinary months, not just an ideal letting period. Run lower-rent and extra-vacancy cases, then add financing sensitivity if borrowing. There is no meaningful target net yield until the tenancy format and debt terms are clear.
 
Fair points. I have not treated the €8,633 as bankable yet, and I need confirmation of whether it assumes a single contract or higher-turnover room letting. I’ll request itemised estimates for building charges, property tax and insurance, then model both tenancy formats. I’ll also separate landlord-paid energy exposure and stress the financing rather than relying on the 7.9% headline.
 
That should expose the decision quickly. I’d build three cases using the same purchase price: quoted rent, reduced rent, and reduced rent plus longer vacancy. Charge each case for management, turnover, insurance, tax, building costs and reserves before considering finance. If the deal only looks attractive in the quoted-rent case, the apparent yield is compensation for optimistic assumptions, not necessarily for Lisbon property risk.
 
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