Rental Yields & Returns in Portugal 2025 — What Investors Can Really Expect

1️⃣ Lisbon — High rents, lower yields, maximum liquidity

Lisbon continues to command Portugal’s highest rental prices:
€22.2 /m² per month, roughly €1,550 for a 70 m² apartment.
Strong tourism, tech migration, and corporate relocations keep occupancy high year-round.

Average sale price: ≈ €2,991 /m² (INE / Idealista)

Typical gross yield: 3.5–4 %

Tenant base: expats, young professionals, digital nomads

Example: A €400,000 one-bed city apartment rents for €1,400 per month (€16.6 /m²) → 4.2 % gross yield before costs.

> “Lisbon isn’t a cash-flow play — it’s a liquidity and capital-growth market,” Herriman explains. “It’s where investors park capital safely in the EU and still beat inflation.”

2️⃣ Porto — Balanced returns and rising demand

Portugal’s northern hub offers lower entry costs and stronger percentage yields.
Rents average €17.7 /m², while purchase prices sit around €3,100 /m² in central zones.

Typical gross yield: 4–5 %
Driver: growing student and tech populations, robust tourism, long-term stay demand.

> “Porto gives you that balance — good capital upside, cultural pull, and better yields than Lisbon,” Herriman notes. “For IPA clients, it’s the market that still feels undervalued.”

3️⃣ Algarve — Lifestyle income with seasonality

The Algarve remains Portugal’s top holiday-rental coast.
Average asking rents sit near €13–14 /m², with sale prices around €2,681 /m² (Idealista).
High-season occupancies of 90 %+ in Lagos, Vilamoura and Tavira push gross yields to 5–6 % for well-managed units.

Regulation note: Following Mais Habitação (2023) and Decree-Law 76/2024, short-term rental (AL) licences remain valid but new registrations are subject to municipal approval. Investors must verify AL status before purchase.

> “The Algarve still works — you just need the right licence and a professional operator,” Herriman advises. “It’s a lifestyle investment that pays its own bills.”