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 Portugal's most watched property markets, offering rental yields that balance steady income with the potential for capital appreciation.
In this article, we break down current rental yields in Lisbon for 2026, covering gross and net returns, neighborhood variations, and the costs that affect your bottom line.
We update this blog post regularly to reflect the latest market data, so you always have a reliable reference point.
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 yields average around 3.8% to 4.7% in early 2026, which is lower than Portugal's national average of 4.3%, reflecting the city's premium property prices.
- The vacancy rate for long-term rentals in Lisbon sits at just 3% in 2026, well below the historical average of 4% to 5%, meaning properties typically stay rented.
- Graça offers one of Lisbon's best yield opportunities at around 4.6%, with property prices averaging just 5,500 euros per square meter compared to 7,700 euros in Chiado.
- Non-resident landlords face a 28% flat tax on rental income, which can reduce a 4.5% gross yield to around 2.5% to 3% net after all expenses.
- The Lisbon Metro Red Line extension to Alcantara, with four new stations including Campo de Ourique, is expected to open in 2026 and could boost rents in western neighborhoods by 5% to 10%.
- Properties priced under 1,000 euros per month in Lisbon rent within 24 hours in about 5% of cases, showing how quickly affordable units get snapped up.
- The average asking rent in Lisbon is 23 euros per square meter in 2026, but signed leases come in closer to 16.50 euros, meaning tenants negotiate 25% to 30% below listing prices.
- Furnished apartments in Lisbon command a premium of 100 to 200 euros monthly over unfurnished units, with expats and students driving this demand.
What are the rental yields in Lisbon as of 2026?
What's the average gross rental yield in Lisbon as of 2026?
As of early 2026, the average gross rental yield for residential properties in Lisbon is estimated to be around 3.8% to 4.7%, with the city's overall average sitting close to 4%.
The realistic range of gross rental yields that covers most typical residential properties in Lisbon spans from about 3% in premium central neighborhoods to 5% or slightly higher in outer districts and emerging areas.
Compared to Portugal's national average of around 4.3%, Lisbon's yields are slightly below the benchmark, largely because the city commands some of the highest property prices in the country while rents have not kept pace proportionally.
The single most important factor currently influencing gross rental yields in Lisbon is the significant gap between property price growth and rental price growth, where home values have surged faster than what tenants can afford to pay.
What's the average net rental yield in Lisbon as of 2026?
As of early 2026, the average net rental yield for residential properties in Lisbon is estimated to be around 2.5% to 3.5%, with most investors landing closer to 3% after accounting for all expenses.
The typical difference between gross and net rental yields in Lisbon is about 1.5 to 2 percentage points, meaning that if you start with a 4.5% gross yield, you can realistically expect around 2.5% to 3% net.
The expense category that most significantly reduces gross yield to net yield in Lisbon is the rental income tax, which stands at 28% for non-residents, combined with the annual IMI property tax at 0.3% and property management fees averaging 8% to 10% of collected rent.
The realistic range of net rental yields for most standard investment properties in Lisbon is 2% to 4%, with the lower end applying to prime central locations where purchase prices are highest and the upper end achievable in outer neighborhoods with better rent-to-price ratios.
By the way, you will find much more detailed rent ranges in our property pack covering the real estate market in Lisbon.
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.
What yield is considered "good" in Lisbon in 2026?
A gross rental yield of 4.5% or higher is generally considered "good" by local investors in Lisbon, as this exceeds the city average and provides a meaningful cushion above financing costs.
The gross yield threshold that typically separates average-performing properties from high-performing ones in Lisbon is around 5%, which usually requires either buying below market value, investing in emerging neighborhoods, or finding properties with unusually strong rental demand.
How much do yields vary by neighborhood in Lisbon as of 2026?
As of early 2026, gross rental yields in Lisbon can vary by 3 to 4 percentage points between the highest-yield and lowest-yield neighborhoods, ranging from under 3% in premium areas to nearly 7% in emerging districts.
The neighborhoods that typically deliver the highest rental yields in Lisbon are those on the city's eastern and northern edges, such as Marvila, Olivais, and Beato, where property prices remain more accessible while rental demand from young professionals and students keeps growing.
The neighborhoods that typically deliver the lowest rental yields in Lisbon are the historic and prestigious central areas like Chiado, Baixa, Avenida da Liberdade, and Principe Real, where property prices are extremely high and rents, while substantial, cannot compensate proportionally.
The main reason yields vary so much across neighborhoods in Lisbon is the mismatch between where property prices have surged most (central, tourist-heavy zones) and where rent-to-price ratios remain favorable (peripheral areas with improving infrastructure and growing populations).
By the way, we've written a blog article detailing what are the current best areas to invest in property in Lisbon.
How much do yields vary by property type in Lisbon as of 2026?
As of early 2026, gross rental yields across different property types in Lisbon range from about 3.5% for larger villas and family homes to around 5% for compact studios and one-bedroom apartments.
The property type that currently delivers the highest average gross rental yield in Lisbon is the small apartment or studio, especially units under 50 square meters, because they attract the widest pool of renters (students, young professionals, digital nomads) and command the highest rent per square meter.
The property type that currently delivers the lowest average gross rental yield in Lisbon is the standalone villa or large family home, as these properties carry high purchase prices and maintenance costs while appealing to a narrower tenant pool that can afford luxury rents.
The key reason yields differ between property types in Lisbon is affordability and demand breadth: smaller units match what most tenants can pay, while larger properties require high incomes that fewer renters possess.
By the way, you might want to read the following:
What's the typical vacancy rate in Lisbon as of 2026?
As of early 2026, the estimated average residential vacancy rate in Lisbon is around 3%, which represents one of the tightest rental markets in recent years.
The realistic range of vacancy rates across different neighborhoods in Lisbon spans from about 2% in high-demand central areas like Arroios and Alfama to 4% or 5% in outer zones such as Olivais and Benfica.
The main factor that currently drives vacancy rates up or down in Lisbon is the persistent housing shortage combined with strong inbound migration from expats, digital nomads, and students, which keeps demand consistently ahead of available supply.
Compared to Portugal's national average vacancy rate of around 4% to 5%, Lisbon's rate is notably lower, reflecting the capital's status as the country's most in-demand rental market.
Finally please note that you will have all the indicators you need in our property pack covering the real estate market in Lisbon.
What's the rent-to-price ratio in Lisbon as of 2026?
As of early 2026, the average rent-to-price ratio (monthly rent divided by purchase price) in Lisbon is approximately 0.35%, which translates to an annual gross yield of around 4%.
A rent-to-price ratio of 0.4% or higher is generally considered favorable for buy-to-let investors in Lisbon, as this equates to a gross yield of about 4.8% to 5%, providing a better buffer against expenses and taxes.
Compared to other major European capitals like Paris, London, and Amsterdam where rent-to-price ratios often fall below 0.3%, Lisbon's ratio remains relatively competitive, though it lags behind smaller Portuguese cities like Porto and Braga.
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.
Which neighborhoods and micro-areas in Lisbon give the best yields as of 2026?
Where are the highest-yield areas in Lisbon as of 2026?
As of early 2026, the top three highest-yield neighborhoods in Lisbon are Graça, Marvila, and Penha de França, where investors can find gross yields that exceed the city average by 1 to 2 percentage points.
The estimated average gross rental yield range in these top-performing areas is approximately 4.5% to 5.5%, with Graça often cited around 4.6% and Marvila reaching toward the higher end as prices remain more affordable.
The main characteristic these high-yield areas in Lisbon share is relatively lower property prices compared to the historic center, combined with growing tenant demand driven by improving transport links, new development, and proximity to employment hubs.
You'll find a much more detailed analysis of the areas with high profitability potential in our property pack covering the real estate market in Lisbon.
Where are the lowest-yield areas in Lisbon as of 2026?
As of early 2026, the top three lowest-yield neighborhoods in Lisbon are Chiado, Avenida da Liberdade, and Principe Real, where premium property prices compress returns despite high rental rates.
The estimated average gross rental yield range in these low-yield areas is approximately 2.5% to 3.5%, with Avenida da Liberdade often falling below 3% due to its status as Lisbon's most exclusive address.
The main reason yields are compressed in these areas of Lisbon is that purchase prices have surged to 7,000 to 10,000 euros per square meter, driven by international buyers and luxury demand, while rents cannot rise proportionally without pricing out most tenants.
Buying a property in a low-yield area is one of the mistakes we cover in our list of risks and pitfalls people face when buying property in Lisbon.
Which areas have the lowest vacancy in Lisbon as of 2026?
As of early 2026, the top three neighborhoods with the lowest residential vacancy rates in Lisbon are Arroios, Alfama, and Campo de Ourique, where demand consistently outstrips supply.
The estimated vacancy rate range in these low-vacancy areas is approximately 1.5% to 2.5%, meaning properties rarely sit empty for more than a week or two between tenants.
The main demand driver that keeps vacancy low in these areas of Lisbon is a combination of central location, excellent public transport connections, and the mix of tenants (locals, expats, and students) who prioritize accessibility over price.
The trade-off investors typically face when targeting these low-vacancy areas is that the high demand has already been priced into property values, meaning yields are often compressed even though occupancy is virtually guaranteed.
Which areas have the most renter demand in Lisbon right now?
The top three neighborhoods currently experiencing the strongest renter demand in Lisbon are Arroios, Estrela, and Avenidas Novas, where listings often receive multiple inquiries within hours of being posted.
The type of renter profile driving most of the demand in these areas is a mix of young professionals working in Lisbon's tech and services sectors, expats relocating for work, and graduate students attending nearby universities.
Rental listings in these high-demand neighborhoods typically get filled within 10 to 15 days when priced correctly, and units below 1,000 euros per month can attract tenants within 24 to 48 hours.
If you want to optimize your cashflow, you can read our complete guide on how to buy and rent out in Lisbon.
Which upcoming projects could boost rents and rental yields in Lisbon as of 2026?
As of early 2026, the top three upcoming infrastructure projects expected to boost rents in Lisbon are the Red Line Metro extension to Alcantara (with four new stations), the Green Line circular loop completion connecting Rato to Cais do Sodre, and the new 16E tram line linking Praca do Comercio to Parque Tejo.
The neighborhoods most likely to benefit from these projects are Campo de Ourique, Alcantara, Estrela, Santos, and the eastern waterfront around Marvila and Beato, as improved transport links typically increase desirability and rental demand.
Investors might realistically expect rent increases of 5% to 10% in these areas once the projects are completed, based on how previous metro expansions in Lisbon have affected nearby property values and rents.
You'll find our latest property market analysis about Lisbon here.
Get fresh and reliable information about the market in Lisbon
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What property type should I buy for renting in Lisbon as of 2026?
Between studios and larger units in Lisbon, which performs best in 2026?
As of early 2026, smaller units like studios and one-bedroom apartments perform better than larger units in Lisbon, both in terms of rental yield (often 0.5 to 1 percentage point higher) and occupancy (typically renting 30% faster).
The typical gross rental yield range for studios in Lisbon is approximately 4.5% to 5.5% (around 900 euros monthly rent or 940 USD / 880 EUR), compared to 3.5% to 4.5% for two- or three-bedroom apartments (around 1,400 to 1,800 euros monthly rent or 1,460 to 1,880 USD / 1,370 to 1,760 EUR).
The main factor that explains why smaller units outperform larger units in Lisbon is affordability: more tenants can afford 900 euros per month than 1,800 euros, creating a deeper demand pool and faster leasing.
One scenario where a larger unit might actually be the better investment choice in Lisbon is when targeting families with children or corporate relocations who need multiple bedrooms and are willing to sign longer leases at premium rents in neighborhoods like Estrela or Campo de Ourique.
What property types are in most demand in Lisbon as of 2026?
As of early 2026, the most in-demand property type in Lisbon is the modern, well-located one- or two-bedroom apartment, ideally with elevator access, a balcony, and proximity to Metro stations.
The top three property types ranked by current tenant demand in Lisbon are: first, one-bedroom apartments in central neighborhoods; second, furnished studios near universities and tech hubs; and third, renovated two-bedroom units in family-friendly areas like Estrela and Campo de Ourique.
The primary demographic trend driving this demand pattern in Lisbon is the influx of digital nomads, tech workers, and international students who prioritize compact, functional living spaces over size, combined with local professionals priced out of homeownership.
One property type that is currently underperforming in demand and likely to remain so in Lisbon is the unrenovated older apartment without elevator in buildings over 50 years old, as tenants increasingly expect modern amenities and accessibility.
What unit size has the best yield per m² in Lisbon as of 2026?
As of early 2026, the unit size range that delivers the best gross rental yield per square meter in Lisbon is approximately 30 to 50 square meters, which typically corresponds to studios and compact one-bedroom apartments.
The typical gross rental yield per square meter for this optimal unit size in Lisbon is around 23 to 27 euros per square meter monthly (approximately 24 to 28 USD or 22 to 26 EUR per square meter), compared to 15 to 20 euros for larger three-bedroom units.
The main reason smaller or larger units tend to have lower yield per square meter compared to the optimal size in Lisbon is that very small micro-studios face legal and livability constraints, while larger units spread rent across more floor area, diluting the per-meter return.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable 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 costs cut my net yield in Lisbon as of 2026?
What are typical property taxes and recurring local fees in Lisbon as of 2026?
As of early 2026, the estimated annual property tax (IMI) for a typical rental apartment in Lisbon is approximately 600 to 1,500 euros (around 630 to 1,570 USD or 590 to 1,470 EUR), based on the city's 0.3% rate applied to the property's fiscal value.
Other recurring local fees landlords must budget for annually in Lisbon include condominium fees of 50 to 150 euros monthly (600 to 1,800 euros per year or 630 to 1,880 USD / 590 to 1,760 EUR), building insurance contributions, and potential AIMI (additional property tax) for properties with fiscal values exceeding 600,000 euros.
These taxes and fees typically represent about 5% to 10% of gross rental income in Lisbon, depending on the property's value and the specific building's condominium charges.
By the way, we cover all the hidden fees and taxes in our property pack covering the real estate market in Lisbon.
What insurance, maintenance, and annual repair costs should landlords budget in Lisbon right now?
The estimated annual landlord insurance cost for a typical rental property in Lisbon is approximately 200 to 400 euros (around 210 to 420 USD or 195 to 390 EUR), covering building risks and landlord liability.
The recommended annual maintenance and repair budget in Lisbon is about 1% to 2% of the property's value, or roughly 10% to 15% of annual rental income, with newer buildings requiring less and older ones requiring more.
The type of repair expense that most commonly catches landlords off guard in Lisbon is plumbing and water damage in older buildings, particularly in pre-1970s construction where pipes may be original and prone to leaks or bursts.
The total combined annual cost landlords should realistically budget for insurance, maintenance, and repairs in Lisbon is approximately 2,000 to 5,000 euros (around 2,090 to 5,230 USD or 1,960 to 4,890 EUR) for a typical rental apartment.
Which utilities do landlords typically pay, and what do they cost in Lisbon right now?
In Lisbon, landlords are typically expected to cover condominium fees (which often include water and building maintenance), while tenants usually pay electricity, gas, internet, and individual water usage directly.
For furnished or all-inclusive rentals aimed at expats and short-term tenants, landlords may include utilities, with the estimated monthly cost in Lisbon running approximately 80 to 150 euros (around 85 to 160 USD or 78 to 147 EUR) for electricity, water, gas, and internet combined.
What does full-service property management cost, including leasing, in Lisbon as of 2026?
As of early 2026, the estimated monthly property management fee for full-service management in Lisbon is approximately 8% to 12% of collected rent, which for a 1,200 euro rental translates to 96 to 144 euros monthly (around 100 to 150 USD or 94 to 141 EUR).
The typical leasing or tenant-placement fee charged on top of ongoing management in Lisbon is about one month's rent, which for a 1,200 euro apartment would be 1,200 euros (around 1,255 USD or 1,175 EUR) each time a new tenant is placed.
What's a realistic vacancy buffer in Lisbon as of 2026?
As of early 2026, landlords in Lisbon should set aside approximately 3% to 5% of annual rental income as a vacancy buffer, which accounts for turnover between tenants and minor gaps in occupancy.
The typical number of vacant weeks per year landlords experience in Lisbon is around 1 to 3 weeks for well-priced properties in desirable locations, though this can extend to 4 to 6 weeks for premium-priced units or properties in less central areas.
Buying real estate in Lisbon can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
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 Name | Why It's Authoritative | How We Used It |
|---|---|---|
| Global Property Guide | It's a respected international property research platform that publishes standardized yield data across countries. | We used it to anchor our gross rental yield estimates for Portugal and Lisbon. We cross-referenced their methodology with our local data to ensure consistency. |
| Idealista | It's Portugal's largest property listing platform with comprehensive asking price and rent data. | We used it to gather neighborhood-level price and rent data for Lisbon. We analyzed listing turnover to estimate vacancy rates and days-on-market. |
| INE (Statistics Portugal) | It's Portugal's official national statistics office, providing authoritative housing and economic data. | We used it to verify contracted rent medians and housing demand patterns. We referenced their regional breakdowns to validate neighborhood-level trends. |
| Portal das Finanças | It's Portugal's official tax authority portal with definitive tax rate information. | We used it to confirm IMI property tax rates and rental income tax obligations. We referenced their official documents for 2025-2026 tax brackets. |
| GuestReady | It's a professional property management company that publishes regular market research on Lisbon. | We used it to identify high-yield neighborhoods and validate property management fee benchmarks. We referenced their area-by-area yield comparisons. |
| Metropolitano de Lisboa | It's the official operator of Lisbon's metro system with authoritative project timelines. | We used it to track infrastructure expansion projects affecting property values. We referenced their official announcements for station openings and extension timelines. |
| Reuters | It's a top-tier global news agency with rigorous verification standards. | We used it to corroborate housing shortage reporting and market trends. We cross-checked their Portugal coverage with local data sources. |
| European Commission | It's the EU executive body that publishes official economic forecasts and project funding data. | We used it to verify infrastructure project financing and timeline information. We referenced their Portugal Recovery and Resilience Plan documents. |
| EDP | It's Portugal's main electricity provider with official tariff information. | We used it to estimate landlord utility costs for inclusive rentals. We referenced their published residential tariffs for Lisbon. |
| EPAL | It's Lisbon's official water utility company with published tariff schedules. | We used it to calculate water costs for landlord-paid utility scenarios. We referenced their domestic tariff structure. |
| Cushman & Wakefield | It's a major international real estate consultancy that publishes professional market reports. | We used it to contextualize Lisbon's premium neighborhood dynamics. We referenced their Portugal property market analyses. |
| Confidencial Imobiliario | It's Portugal's leading property market intelligence firm with transaction-based data. | We used it to validate the gap between asking prices and actual transaction values. We referenced their indices for Lisbon's residential market. |
| AirROI | It's a short-term rental analytics platform that tracks Airbnb market performance. | We used it to understand short-term rental occupancy and revenue patterns in Lisbon. We referenced their seasonal demand data. |
| The Portugal News | It's an established English-language news source covering Portuguese current affairs. | We used it to track infrastructure project updates and regulatory changes. We referenced their reporting on metro expansion timelines. |
| International Property Alerts | It's a property investment advisory that publishes detailed Portugal market analysis. | We used it to contextualize net yield expectations after taxes and expenses. We referenced their investor-focused yield breakdowns. |
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