Authored by the expert who managed and guided the team behind the Portugal Property Pack
Yes, the analysis of Lisbon's property market is included in our pack
Lisbon remains one of Europe's most attractive cities for foreign property investors who want to earn rental income in 2026.
This guide covers everything you need to know about renting out a property in Lisbon as a foreigner, from legal requirements to realistic yields and neighborhood performance.
We constantly update this blog post to reflect the latest market data, regulations, and rental trends in Lisbon.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Lisbon.
Insights
- Lisbon's gross rental yield averages around 4.1% in early 2026, but after operating costs and Portuguese income tax, net yields typically drop to about 2.1%, which many foreign investors underestimate.
- The 2026 official rent update coefficient in Lisbon is capped at 2.24%, meaning landlords with existing tenants cannot raise rents beyond this percentage without renegotiating the lease.
- Short-term rentals in Lisbon face strict "containment area" rules that block new Alojamento Local registrations in most central parishes, making an existing AL license a valuable asset.
- Furnished apartments in Lisbon typically rent 15% to 25% faster than unfurnished ones, especially in neighborhoods popular with expats like Príncipe Real and Estrela.
- Neighborhoods like Marvila and Penha de França offer gross yields closer to 5% in Lisbon because purchase prices have not caught up with rising tenant demand.
- A realistic all-in monthly holding cost for a one-bedroom rental in Lisbon is around €700, including condo fees, property tax, insurance, management, maintenance, and vacancy allowance.
- Lisbon's short-term rental market runs at roughly 67% average occupancy, but this masks strong seasonality with summer months exceeding 80% and winter dipping below 50%.
- Non-EU property owners in Lisbon almost always need a fiscal representative to stay compliant with Portuguese tax authorities, adding an ongoing administrative cost.
- The gap between INE contract-based median rents and Idealista asking rents in Lisbon can be 20% or more, so investors should use both sources to set realistic expectations.
Can I legally rent out a property in Lisbon as a foreigner right now?
Can a foreigner own-and-rent a residential property in Lisbon in 2026?
As of early 2026, foreigners can legally own residential property in Lisbon and rent it out without any nationality-based restrictions on ownership or landlord status.
Most foreign investors hold Lisbon rental property directly in their personal name, though some use a Portuguese company (Sociedade Unipessoal) if their tax situation or liability concerns make that structure worthwhile.
The main practical barrier is not ownership itself but rather the administrative setup, specifically getting a Portuguese tax number (NIF), appointing a fiscal representative if you live outside the EU, and registering your rental activity with the tax authority.
If you're not a local, you might want to read our guide to foreign property ownership in Lisbon.
Do I need residency to rent out in Lisbon right now?
No, you do not need Portuguese residency to rent out a property in Lisbon, and many foreign landlords successfully manage their rentals while living abroad full-time.
However, you will need a Portuguese NIF (tax identification number) because all rental contracts, rent receipts, and landlord tax filings run through the Portal das Finanças system.
Legally, rent can be paid into a foreign bank account, but having a Portuguese account makes paying property tax (IMI), condo fees, and maintenance costs much simpler and avoids international transfer headaches.
Managing a Lisbon rental remotely is entirely feasible if you hire a local property manager who handles tenant communication, inspections, and compliance, which most non-resident landlords do.
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What rental strategy makes the most money in Lisbon in 2026?
Is long-term renting more profitable than short-term in Lisbon in 2026?
As of early 2026, short-term rentals can generate higher gross revenue in Lisbon, but only if your property has a valid Alojamento Local license and you can manage the operational complexity of guest turnover, cleaning, and seasonal demand.
A well-managed short-term rental in a prime Lisbon location might gross €18,000 to €25,000 per year (roughly $19,500 to $27,000 or €18,000 to €25,000), while a comparable long-term rental would typically bring in €14,000 to €18,000 annually (roughly $15,000 to $19,500).
Short-term renting tends to outperform financially in tourist-heavy areas like Alfama, Baixa, and Bairro Alto, but Lisbon's containment zone rules now block new AL registrations in most of these central parishes, so long-term renting is often the only realistic option.
What's the average gross rental yield in Lisbon in 2026?
As of early 2026, the average gross rental yield for residential properties in Lisbon sits at around 4.1%, which is competitive by Western European standards but not exceptional.
The realistic range for most Lisbon properties falls between 3.5% and 5.0%, depending on neighborhood, building condition, and whether the unit is a studio or a larger apartment.
Studios and one-bedroom apartments in Lisbon typically achieve the highest gross yields because smaller units command higher rent per square meter, and purchase prices scale more favorably than for larger family apartments.
By the way, we have much more granular data about rental yields in our property pack about Lisbon.
What's the realistic net rental yield after costs in Lisbon in 2026?
As of early 2026, the average net rental yield in Lisbon after operating costs but before income tax is around 2.9%, and after Portuguese income tax it drops to approximately 2.1%.
Most Lisbon landlords experience net yields in the range of 1.6% to 2.6% after all costs and taxes, which can surprise investors who focus only on gross numbers.
The three biggest cost categories that erode Lisbon yields are maintenance reserves (older buildings need significant upkeep), property management fees (typically 8% to 10% of rent for remote owners), and Portuguese income tax on rental profits (which applies even to non-residents).
You might want to check our latest analysis about gross and net rental yields in Lisbon.
What monthly rent can I get in Lisbon in 2026?
As of early 2026, typical monthly rents in Lisbon for unfurnished long-term rentals in good condition are around €750 ($815/€750) for a studio, €1,200 ($1,300/€1,200) for a one-bedroom, and €1,650 ($1,790/€1,650) for a two-bedroom apartment.
A decent studio in Lisbon in 2026 rents for between €650 and €950 per month ($705 to $1,030), with the lower end found in neighborhoods like Benfica or Olivais and the higher end in central areas like Areeiro or Arroios.
A typical one-bedroom apartment in Lisbon commands €1,000 to €1,500 monthly ($1,085 to $1,630), with location and building amenities like an elevator or parking driving the difference.
A two-bedroom apartment in Lisbon falls in the €1,350 to €2,100 range ($1,465 to $2,280), with premium pricing for units in neighborhoods like Campo de Ourique, Alvalade, or Parque das Nações.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Lisbon.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Portugal versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you’re planning to invest there.
What are the real numbers I should budget for renting out in Lisbon in 2026?
What's the total "all-in" monthly cost to hold a rental in Lisbon in 2026?
As of early 2026, the total all-in monthly cost to hold and maintain a typical one-bedroom rental property in Lisbon is around €700 ($760/€700), assuming no mortgage and that the tenant pays day-to-day utilities.
The realistic range for most Lisbon rental properties is €500 to €950 per month ($545 to $1,030), depending on building age, property value, condo fees, and whether you use professional management.
The single largest cost category for Lisbon landlords is usually the maintenance reserve, because older Lisbon buildings (which dominate the housing stock) require ongoing repairs, facade work, and elevator maintenance that can easily run 0.75% of property value annually.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Lisbon.
What's the typical vacancy rate in Lisbon in 2026?
As of early 2026, the typical vacancy rate for long-term rental properties in Lisbon is around 8%, which translates to roughly one month of vacancy per year for planning purposes.
Landlords in Lisbon should budget for about one month of lost rent annually because even well-located properties need time for tenant turnover, cleaning, minor repairs, and re-listing between leases.
The main factor causing vacancy rates to vary across Lisbon neighborhoods is proximity to metro stations and major employment centers, with areas like Saldanha and Parque das Nações filling faster than peripheral neighborhoods like Ajuda or Carnide.
Tenant turnover in Lisbon peaks in late summer (August and September) when students and young professionals relocate before the academic and work year begins, creating both higher vacancy and faster re-letting during this period.
We have a whole part covering the best rental strategies in our pack about buying a property in Lisbon.
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Where do rentals perform best in Lisbon in 2026?
Which neighborhoods have the highest long-term demand in Lisbon in 2026?
As of early 2026, the three neighborhoods with the highest overall long-term rental demand in Lisbon are Alvalade, Areeiro, and Campo de Ourique, all of which combine good transit access, local amenities, and steady tenant interest across multiple demographics.
Families looking for long-term rentals in Lisbon gravitate toward Parque das Nações, Alvalade, and Telheiras because these areas offer more space, good schools, parks, and a calmer atmosphere than the historic center.
Students create strong rental demand in neighborhoods near universities, particularly Cidade Universitária, Alameda, Areeiro, and Entrecampos, where room-share arrangements and affordable one-bedrooms fill quickly each academic year.
Expats and international professionals prefer walkable, lifestyle-oriented neighborhoods like Príncipe Real, Estrela, Santos, and Chiado, where proximity to cafes, restaurants, and cultural attractions justifies premium rents.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Lisbon.
Which neighborhoods have the best yield in Lisbon in 2026?
As of early 2026, the three neighborhoods with the best rental yields in Lisbon are Marvila, Penha de França, and Benfica, where purchase prices remain relatively affordable while tenant demand has grown steadily.
Gross rental yields in these top-yielding Lisbon neighborhoods typically range from 4.5% to 5.5%, compared to the citywide average of around 4.1%.
The main reason these neighborhoods achieve higher yields is that property prices have not yet caught up with rent growth, a common pattern in regenerating or traditionally working-class areas where investor attention arrived later than in premium historic zones.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Lisbon.
Where do tenants pay the highest rents in Lisbon in 2026?
As of early 2026, the three neighborhoods where tenants pay the highest rents in Lisbon are Avenida da Liberdade, Chiado, and Príncipe Real, which form the city's most prestigious residential corridor.
A standard one-bedroom apartment in these premium Lisbon neighborhoods rents for €1,800 to €2,500 per month ($1,955 to $2,715), while two-bedrooms can reach €2,500 to €3,500 ($2,715 to $3,800) depending on views and renovation quality.
What allows these neighborhoods to command Lisbon's highest rents is the combination of historic architecture, walkability to high-end retail and dining, and scarcity of available units in well-maintained buildings with elevators.
The typical tenant profile in these highest-rent Lisbon neighborhoods includes senior executives at multinational companies, embassy staff, successful entrepreneurs, and wealthy retirees from Northern Europe who prioritize lifestyle and convenience over space.
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Portugal. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
What do tenants actually want in Lisbon in 2026?
What features increase rent the most in Lisbon in 2026?
As of early 2026, the three property features that increase monthly rent the most in Lisbon are having an elevator (critical in walk-up buildings above the third floor), air conditioning (Lisbon summers are increasingly hot), and proximity to a metro station (tenants will pay a premium for under-10-minute walks).
An elevator in a Lisbon building without one can add 10% to 15% to the achievable rent, which is especially significant for fourth and fifth-floor apartments that would otherwise struggle to attract tenants willing to climb stairs daily.
One commonly overrated feature that Lisbon landlords invest in but tenants do not pay much extra for is high-end kitchen appliances, because most tenants care more about layout and natural light than whether the oven is a premium brand.
One affordable upgrade that provides strong returns in Lisbon is installing double-glazed windows, which reduces street noise (a real issue in historic neighborhoods) and improves energy efficiency, both of which tenants notice immediately during viewings.
Do furnished rentals rent faster in Lisbon in 2026?
As of early 2026, furnished apartments in Lisbon typically rent one to three weeks faster than unfurnished ones, with the biggest time savings seen in neighborhoods popular with expats and international students like Príncipe Real, Arroios, and Alameda.
Furnished rentals in Lisbon command a rent premium of roughly 15% to 25% over unfurnished equivalents, though this varies by neighborhood and quality of furnishings, and landlords should factor in higher wear-and-tear and replacement costs.
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How regulated is long-term renting in Lisbon right now?
Can I freely set rent prices in Lisbon right now?
For new leases in Lisbon, landlords can freely negotiate the initial rent with tenants based on market conditions, with no government-mandated price caps on what you can charge when signing a fresh contract.
However, rent increases during an existing tenancy are regulated in Portugal, and for 2026 the official annual update coefficient is capped at 2.24%, meaning landlords cannot raise rents on sitting tenants beyond this percentage without renegotiating the lease terms.
What's the standard lease length in Lisbon right now?
The standard lease length for residential rentals in Lisbon is one year or longer, with many landlords preferring two or three-year initial terms for stability, and leases typically auto-renew unless either party gives proper notice.
Landlords in Lisbon can legally require a security deposit of up to two months' rent (€2,400 or $2,600 for a typical one-bedroom), though one month is more common, and some also request the first month's rent in advance.
Portuguese law requires landlords to return the security deposit within a reasonable period after the lease ends, minus any legitimate deductions for unpaid rent or damages beyond normal wear and tear, with disputes potentially resolved through local courts.
We made this infographic to show you how property prices in Portugal compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
How does short-term renting really work in Lisbon in 2026?
Is Airbnb legal in Lisbon right now?
Yes, Airbnb-style short-term rentals are legal in Lisbon, but only if the property is registered as Alojamento Local (AL) with a valid registration number (RNAL) that must be displayed on all platform listings.
To legally operate a short-term rental in Lisbon, you must register with Turismo de Portugal through their online system, but Lisbon's municipal rules add an extra layer by designating "containment areas" where new AL registrations are blocked or severely restricted in most central parishes.
Lisbon does not have a simple citywide annual night limit like some European cities, but the real constraint is whether you can register at all in your specific location, since containment zones effectively prevent new short-term rental businesses in areas like Alfama, Baixa, and Bairro Alto.
Operating an unlicensed or non-compliant short-term rental in Lisbon can result in fines ranging from €2,500 to €40,000 ($2,715 to $43,400), plus potential forced closure and platform delisting, making compliance essential for any serious investor.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Lisbon.
What's the average short-term occupancy in Lisbon in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Lisbon is around 67%, which translates to roughly 20 nights booked per month on average across the year.
The realistic occupancy range for most Lisbon short-term rentals falls between 50% and 80%, depending on property quality, pricing strategy, location within the city, and how actively the listing is managed.
The highest occupancy months for Lisbon short-term rentals are May through October, when tourism peaks and well-located properties can achieve 75% to 85% occupancy, especially during festival season and summer holidays.
The lowest occupancy months in Lisbon are January and February, when tourism drops significantly and many short-term rentals see occupancy fall to 40% to 55%, requiring lower nightly rates or longer minimum stays to fill gaps.
Finally, please note that you can find much more granular data about this topic in our property pack about Lisbon.
What's the average nightly rate in Lisbon in 2026?
As of early 2026, the average nightly rate for short-term rentals in Lisbon is around €120 ($130/€120), though this varies significantly by property type, location, and season.
The realistic nightly rate range for most Lisbon short-term rentals spans from €70 to €200 ($76 to $217), with budget listings in peripheral areas at the low end and renovated apartments with views in Alfama or Chiado at the high end.
The typical nightly rate difference between peak season (June to September) and off-season (November to February) in Lisbon is €30 to €50 ($33 to $54), meaning a property charging €130 in summer might drop to €80 to €100 in winter to maintain bookings.
Is short-term rental supply saturated in Lisbon in 2026?
As of early 2026, Lisbon's short-term rental market is competitive but not fully saturated, with the 67% average occupancy rate indicating that demand still absorbs supply, though margins for poorly managed listings are thin.
The number of active short-term rental listings in Lisbon has stabilized in recent years because municipal containment zones have blocked new AL registrations in most central parishes, effectively capping legal supply growth.
The most oversaturated neighborhoods for short-term rentals in Lisbon are Alfama, Mouraria, and Baixa, where high listing density and regulatory scrutiny mean new entrants face stiff competition and limited differentiation opportunities.
Neighborhoods with room for new short-term rental supply include areas outside containment zones like Marvila, Beato, and Alcântara, where AL registrations remain possible and tourism infrastructure is improving with new restaurants and attractions.
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What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Lisbon, we always rely on the strongest methodology we can … and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why it's authoritative | How we used it |
|---|---|---|
| Diário da República (Official Gazette) | Portugal's official legal record for rules published into law. | We used it to confirm the official 2026 rent update coefficient. We relied on it to avoid secondary summaries for legal numbers. |
| INE (Statistics Portugal) | Portugal's national statistics agency and standard reference for housing data. | We used it to anchor real-world rent levels using median rent per m² for new leases. We translated these into realistic monthly rents by apartment size. |
| Lisbon City Council | The municipality is the regulator for local rules inside Lisbon. | We used it to explain Lisbon's AL containment areas for new registrations. We framed short-term rental feasibility at the parish level. |
| Turismo de Portugal | Official tourism authority explaining the national AL registration system. | We used it to confirm short-term rental registration requirements. We layered municipal rules on top of this national baseline. |
| Portal das Finanças | Official tax portal where landlords register contracts and issue receipts. | We used it to show that long-term renting is supported online. We reinforced that tax compliance applies even for non-resident landlords. |
| Tax Authority (AT) FAQ | The Tax Authority speaking directly about fiscal representation rules. | We used it to explain when non-residents need fiscal representation. We built the remote compliance checklist from this source. |
| Global Property Guide | Long-running cross-country yield tracker with consistent public data. | We used it to anchor gross yield ranges by unit type for Lisbon. We triangulated it with other professional sources. |
| Idealista | Portugal's biggest property portal with transparent methodology. | We used it to estimate market asking rents for new listings. We complemented INE's contract-based medians with this data. |
| AirDNA | Widely used short-term rental data provider with standardized metrics. | We used it to estimate realistic short-term occupancy and nightly rates. We discussed saturation signals using their supply data. |
| CBRE Portugal | Global real estate research firm with recurring Portugal reporting. | We used it to triangulate yields and market direction. We sanity-checked our yield ranges against professional research. |
| JLL Research | Global research house publishing recurring Portugal market updates. | We used it for macro context on supply constraints and demand strength. We supported why Lisbon remains competitive for landlords. |
We have made this infographic to give you a quick and clear snapshot of the property market in Portugal. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.