Hi everyone, my name’s Audrey. I’m considering the reduced investment route by purchasing a rehab property either in Madeira or Lagos. As part of the requirements for a rehabilitation project, the property must either 1) have completed construction at least 30 years ago, or 2) be situated in an Urban Rehabilitation Area.
Does anyone have experience and stories to tell about purchasing a rehab project in either Madeira or Lagos? How abundant are these types of properties that meet the above requirements? How do you find which areas are officially “Urban Rehabilitation Areas”?
More importantly, how long did the process take to complete a rehab? I have a friend who’s building a home in Lisbon and had to pause construction due to the rise in prices. I can imagine this would be an even more challenging process to complete on a secluded island like Madeira. Any tips and references would be greatly appreciated. Thank you!
Just my 2 cents instead of rehabilitation if you could invest then invest in Mercan 280000 project it will be more cost effective solution because inflation is crazy high in Europe and if you are an American then it gets even sweeter as currency fluctuations now 1usd=almost 1eur so you are gaining almost 20% right there.
So… long story short, I did do some research over the course of 2 years and finally decided that the fund route was not for us. For some the ease of investment and reduced documentation may be worth it. But the more I looked into it the more I realized it was not something I felt comfortable with. I wanted more flexibility and ROI. There is a lot of discussion in this thread on this mercan topic
tl;dr I went the reduced investment and rehabilitation route. It is not easy to find properties to your exact specifications - 30yrs or older, in a low-density rehabilitation area and eligible for golden visa. A map like this could help you but best to retain services of an attorney who can advice you on these things. I spent the better part of a year scouting properties on idealista — Real estate in Portugal. Houses and apartments for sale and rent, then contacting the respective agents for relevant age/construction/renovation information, and eventually forwarding them to our attorney for confirmation to see if they’re valid for GV. Had at least 3 properties fall through during this process before we finally landed one that suited all our needs. (After going through countless others during review process)
The final property we ended up with we lucked out with the the seller’s agent who eventually became our property manager and renovations project manager. We may have overpaid for a few bits here and there but in general the transaction has been consistent with what I expect things to cost.
Should’ve added this early on - I don’t think Lagos is eligible for reduced investment GV anymore due to high density.
I could be totally wrong on this, but I believe that these places are no longer in the Golden Visa scheme . At least Lagos isn’t - it ended 31 December 2021. Perhaps there are some exemptions that I’m not aware of, however.
@GVHope thanks so much for sharing your story here. We are also looking into the 280K rehabilitation project but are unsure how feasible it is to manage the entire process (hiring a lawyer/realtor/buying a property/renovating the property) while staying in the U.S. How often did you have to fly to PT? We have a small child and flying back and forth creates all sorts of headaches for us at this point.
Also, do you happen to know if any property that is 30 y.o. qualifies for GV? If not, how is it being decided?
If you could share your lawyer’s and realtor’s contacts, that would be much appreciated.
Will try to answer the best I can. Due to various immigration and COVID related reasons, we still haven’t stepped foot in Portugal.
We had a friend recommend a really good lawyer to us, they put us at ease since our first conversation and to this day continue to be someone we trust. For renovations as I mentioned the seller’s agent, renovation manager, and property manager was the same person for us. From what I heard from other experiences renovations are not for the faint of heart in Portugal especially these days in Portugal. And I did not have any luck finding folks when I tried to look for registered contractors myself.
Did not have a great experience with realtors. During the course of our search started realizing that the concept of a buyer’s agent is not a thing in Portugal. So we dropped that effort and decided to do the search ourselves on Idealista. We did engage an evaluator based out of Tomar who was able to go vet out eligible properties we found and give us a quick report on the condition. This was expensive but necessary since we didn’t have any other boots on the ground.
The last part is a bit tricky and you will need an attorney’s help to be confident. We had several properties fall through during the evaluation phase even though they were 30yrs old. Based on what I know there are a few things that the property should meet -
- Must be 30yrs or older
- Must be in a low-density area according to NUTS III records (There are some areas where the county is low-density but some Freguesias are not)
- Must be in an area of urban renovation
- May not have any significant renovations done recently on record
- Must be company that is registered for renovation contracts
- Renovations cannot be cosmetic, cannot be furniture/appliance purchases, must meet certain local regulations, and be registered with local camara
I’m sure there were additional considerations that I’m forgetting at the moment but these are the base minimum and YMMV according to the area you’re looking into.
Can check with our attorney to see if they’re comfortable with me sharing their contact info before DMing you. And its usually recommended to find an attorney who is local to the property address because most are not willing to travel to conduct these transactions.