Authored by the expert who managed and guided the team behind the Portugal Property Pack
Everything you need to know before buying real estate is included in our Portugal Property Pack
Yes, foreigners can legally rent out residential property in Portugal in 2026, and this guide covers everything you need to know about yields, regulations, and strategies.
We constantly update this blog post to reflect the latest data and legal requirements for renting out property in Portugal.
Whether you want to do long-term renting or short-term Airbnb-style hosting, we break down the real numbers and practical steps below.
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 Portugal.
Insights
- Portugal's national gross rental yield sits around 6.5% in early 2026, but Lisbon drops to roughly 5.3% because property prices have climbed faster than rents.
- The official 2026 rent increase coefficient for existing leases in Portugal is capped at 2.24%, which limits how much you can raise rent on current tenants.
- Lisbon has over 21,600 active short-term rental listings according to AirDNA, making it one of the most competitive Airbnb markets in Southern Europe.
- Non-EU residents who want to rent out property in Portugal must appoint a fiscal representative to handle tax obligations on their behalf.
- Porto's short-term rentals average around 66% occupancy with nightly rates near €110, which can outperform long-term renting in prime tourist zones.
- Portuguese landlords can legally collect up to four months of rent upfront, split between a two-month deposit and two months of advance rent.
- Secondary cities like Braga and Coimbra often deliver net yields between 4% and 5%, outperforming Lisbon's compressed returns.
- Some Portuguese municipalities have declared "containment zones" where new Alojamento Local registrations are restricted or banned entirely.
Can I legally rent out a property in Portugal as a foreigner right now?
Can a foreigner own-and-rent a residential property in Portugal in 2026?
As of early 2026, Portugal allows foreigners of any nationality to buy residential property and rent it out without restrictions based on citizenship.
Most foreign landlords in Portugal simply own property in their personal name, though some set up a Portuguese company if they plan to scale their portfolio or want specific tax treatment.
The main limitation is not about ownership itself but about compliance: you must register your lease with the tax authority, issue official rent receipts, and if you do short-term rentals, you need an Alojamento Local license which some municipalities now restrict in high-tourism areas.
If you're not a local, you might want to read our guide to foreign property ownership in Portugal.
Do I need residency to rent out in Portugal right now?
You do not need to live in Portugal or hold residency to rent out a property there, so remote landlords from anywhere in the world can legally operate.
However, you absolutely need a Portuguese tax identification number called a NIF, which is required to own property, sign contracts, and file taxes in Portugal.
While Portuguese law does not mandate a local bank account, most landlords find that having a Portuguese or SEPA bank account makes rent collection, utility payments, and condo fee management much smoother.
Managing a rental property in Portugal remotely is entirely feasible if you have your NIF, a fiscal representative (required for non-EU residents), and ideally a local property manager or trusted contact for emergencies.
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What rental strategy makes the most money in Portugal in 2026?
Is long-term renting more profitable than short-term in Portugal in 2026?
As of early 2026, short-term renting can generate higher gross revenue in Portugal's top tourist destinations like Lisbon and Porto, but it comes with significantly higher operating costs, regulatory hurdles, and income volatility.
A well-located one-bedroom apartment in central Lisbon might earn around €12,000 to €14,000 per year on a long-term lease, while the same unit could gross €18,000 to €25,000 through Airbnb, though you would need to subtract 25% to 40% for management, cleaning, platform fees, and furnishing costs.
Short-term renting tends to outperform financially in properties located within walking distance of major tourist attractions, historic centers, or beach areas with strong seasonal demand, while properties in residential neighborhoods typically do better as long-term rentals.
What's the average gross rental yield in Portugal in 2026?
As of early 2026, the average gross rental yield for residential property across Portugal is approximately 6.5%, calculated by dividing annual rent by purchase price.
The realistic range spans from about 4.5% in expensive coastal and resort areas up to 7.5% in well-located secondary cities, with most investors landing somewhere in between depending on their purchase price and location.
Smaller units like studios and one-bedroom apartments typically achieve the highest gross yields in Portugal because they command relatively high rents per square meter compared to their lower total purchase prices.
By the way, we have much more granular data about rental yields in our property pack about Portugal.
What's the realistic net rental yield after costs in Portugal in 2026?
As of early 2026, the average net rental yield after all costs for residential property in Portugal falls between 3.5% and 4.5%, depending on location and how efficiently you manage expenses.
Most landlords in Portugal realistically experience net yields ranging from 3% in prime Lisbon locations up to 5% in secondary cities like Braga or Coimbra where purchase prices are more reasonable relative to rents.
The three main cost categories that eat into your gross yield in Portugal are condominium fees (which can be substantial in older buildings requiring facade or elevator repairs), property management fees if you are abroad (typically 8% to 12% of rent), and the annual rent increase cap of 2.24% which limits your ability to keep pace with rising costs on existing leases.
You might want to check our latest analysis about gross and net rental yields in Portugal.
What monthly rent can I get in Portugal in 2026?
As of early 2026, typical monthly asking rents in Portugal are around €575 (approximately $600 or €575) for a studio, €820 ($855 or €820) for a one-bedroom, and €1,230 ($1,280 or €1,230) for a two-bedroom apartment based on national averages.
For a decent studio in Portugal, realistic entry-level rents range from €400 to €600 ($415 to $625) in most cities outside the premium Lisbon center.
A typical one-bedroom apartment in Portugal commands mid-range rents between €650 and €1,000 ($680 to $1,040), with Lisbon averaging around €1,010 and Porto around €775.
For a standard two-bedroom apartment in Portugal, expect to charge between €950 and €1,500 ($990 to $1,560) in most urban areas, rising above €1,500 in central Lisbon neighborhoods.
If you want to know more about this topic, you can read our guide about rents and rental incomes in Portugal.
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 Portugal in 2026?
What's the total "all-in" monthly cost to hold a rental in Portugal in 2026?
As of early 2026, the total monthly holding cost for a typical rental apartment in Portugal runs between €100 and €250 ($105 to $260) when you add up condominium fees, insurance, small repairs, and basic administration.
The realistic range spans from about €80 ($85) per month for a well-maintained newer building with low condo fees up to €350 ($365) or more for older buildings in historic centers that face ongoing restoration levies.
In Portugal, condominium fees tend to be the largest single holding cost because many older apartment buildings require expensive communal repairs to facades, roofs, elevators, and plumbing that get shared among all owners.
You want to go into more details? Check our list of property taxes and fees you have to pay when buying a property in Portugal.
What's the typical vacancy rate in Portugal in 2026?
As of early 2026, the typical vacancy rate for rentable investment properties in high-demand Portuguese cities like Lisbon and Porto runs between 4% and 8%, which translates to roughly half a month to one month vacant per year.
Landlords in Portugal should realistically budget for one to one and a half months of vacancy per year in balanced markets, accounting for tenant turnover time and occasional longer gaps between leases.
The main factor driving vacancy differences across Portuguese neighborhoods is proximity to metro stations and employment centers, since tenants prioritize commute times and will pay faster for well-connected locations.
In Portugal, the highest tenant turnover typically happens in late summer (August and September) when students relocate and families prefer to move before the school year begins.
We have a whole part covering the best rental strategies in our pack about buying a property in Portugal.
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Where do rentals perform best in Portugal in 2026?
Which neighborhoods have the highest long-term demand in Portugal in 2026?
As of early 2026, the neighborhoods with the highest overall long-term rental demand in Portugal are Alvalade and Campo de Ourique in Lisbon, plus Cedofeita and Bonfim in Porto, all of which combine metro access with strong local services.
Families looking for long-term rentals in Portugal gravitate toward Telheiras and Parque das Nações in Lisbon or Foz do Douro and Boavista in Porto, where they find better schools, green spaces, and quieter streets.
Students drive strong rental demand in neighborhoods near universities, particularly around Cidade Universitária and Campo Grande in Lisbon and the Asprela university cluster in Porto.
Expats and international professionals seeking long-term rentals in Portugal tend to cluster in Príncipe Real, Estrela, and Parque das Nações in Lisbon, or Cedofeita and Foz in Porto, where they find renovated apartments and walkable urban lifestyle.
By the way, we've written a blog article detailing what are the current best areas to invest in property in Portugal.
Which neighborhoods have the best yield in Portugal in 2026?
As of early 2026, the neighborhoods offering the best rental yields in Portugal include Benfica and Marvila in Lisbon, Bonfim and parts of Campanhã in Porto, plus secondary cities like Braga and Coimbra where prices remain more affordable.
These higher-yielding Portuguese neighborhoods typically deliver gross yields between 6% and 8%, compared to 4.5% to 5.5% in the premium historic centers.
The main characteristic that allows these neighborhoods to achieve better yields is that they sit one metro stop or one neighborhood away from the most expensive areas, so purchase prices are significantly lower while rents remain strong due to spillover demand from priced-out tenants.
We cover a lot of neighborhoods and provide a lot of updated data in our pack about real estate in Portugal.
Where do tenants pay the highest rents in Portugal in 2026?
As of early 2026, the neighborhoods where tenants pay the highest rents in Portugal are Chiado and Príncipe Real in central Lisbon, Parque das Nações in eastern Lisbon, and Foz do Douro in Porto, where monthly rents commonly exceed €20 per square meter.
In these premium Portuguese neighborhoods, a standard one-bedroom apartment typically rents for €1,200 to €1,800 ($1,250 to $1,875) per month, while two-bedrooms often reach €1,800 to €2,500 ($1,875 to $2,600).
These neighborhoods command Portugal's highest rents primarily because they combine historic charm or modern riverside development with extremely limited supply, as strict building regulations and protected architecture prevent significant new construction.
The typical tenant profile in these highest-rent Portuguese neighborhoods includes senior executives, embassy staff, well-funded tech workers, and affluent retirees who prioritize location prestige, walkability, and turnkey quality over value for money.
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 Portugal in 2026?
What features increase rent the most in Portugal in 2026?
As of early 2026, the three property features that increase monthly rent the most in Portugal are proximity to a metro station (within 5 minutes walk), proper thermal insulation with efficient heating and cooling, and a recently renovated modern kitchen and bathroom.
Metro proximity is the single most valuable feature in Portuguese cities, adding an estimated 10% to 15% rent premium compared to otherwise identical apartments that require a bus ride or longer walk to transit.
One commonly overrated feature that Portuguese landlords invest in but tenants do not pay much extra for is high-end designer finishes or luxury appliances, since most tenants care more about functionality and energy efficiency than brand names.
An affordable upgrade that provides strong return on investment for landlords in Portugal is installing double-glazed windows and basic air conditioning, which dramatically improves comfort in Portugal's poorly insulated older buildings and justifies higher rent.
Do furnished rentals rent faster in Portugal in 2026?
As of early 2026, furnished apartments in Portugal typically rent about two to three weeks faster than unfurnished ones, especially in neighborhoods popular with expats, students, and corporate relocations.
Furnished rentals in Portugal command a rent premium of approximately 10% to 20% over unfurnished equivalents, though this premium only holds if the furniture is functional, modern, and well-maintained rather than outdated hand-me-downs.
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How regulated is long-term renting in Portugal right now?
Can I freely set rent prices in Portugal right now?
When signing a new lease in Portugal, landlords have significant freedom to set the initial rent at whatever price the market will bear, with no government-mandated caps on starting rents for new contracts.
However, once a tenant is in place, annual rent increases on existing leases in Portugal are capped by an official coefficient published each year, which for 2026 is set at 2.24% according to the Diário da República.
What's the standard lease length in Portugal right now?
The most common lease length for residential rentals in Portugal is one year with automatic renewal, though fixed-term contracts of two, three, or five years are also widely used and give landlords more predictability.
Portuguese law limits security deposits to a maximum of two months' rent, and landlords can also collect up to two months' rent in advance, meaning the practical maximum upfront payment is four months' equivalent.
At the end of a tenancy in Portugal, landlords must return the security deposit within a reasonable timeframe (typically interpreted as 30 days), minus any documented deductions for unpaid rent or damages beyond normal wear and tear.
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 Portugal in 2026?
Is Airbnb legal in Portugal right now?
Airbnb-style short-term rentals are legal in Portugal provided you register your property as an Alojamento Local and obtain an RNAL registration number that must be displayed on all listings.
To legally operate a short-term rental in Portugal, you must submit a prior communication to the local municipality through the Balcão do Empreendedor portal, after which you receive your registration number if approved.
Some Portuguese municipalities, particularly in central Lisbon and Porto tourist zones, have declared "containment zones" where new Alojamento Local registrations are suspended or heavily restricted, so night limits effectively exist in those areas through licensing bans rather than explicit day caps.
Operating an unlicensed short-term rental in Portugal can result in fines starting around €2,500 and potentially reaching €40,000 for repeat violations, plus forced closure of your listing on booking platforms.
By the way, we also have a blog article detailing whether owning an Airbnb rental is profitable in Portugal.
What's the average short-term occupancy in Portugal in 2026?
As of early 2026, the average annual occupancy rate for short-term rentals in Portugal's main markets is approximately 66% to 67%, based on data from Lisbon and Porto which together represent the majority of the country's vacation rental activity.
The realistic occupancy range for most short-term rentals in Portugal spans from about 45% for poorly optimized or badly located listings up to 80% or higher for professionally managed properties in prime tourist locations.
Peak occupancy months for short-term rentals in Portugal are June through September when summer tourism peaks, plus the Christmas and New Year period when Lisbon and Porto see strong city-break demand.
The lowest occupancy months for Portuguese short-term rentals are typically January through early March, when post-holiday travel slows down and weather is least appealing for leisure visitors.
Finally, please note that you can find much more granular data about this topic in our property pack about Portugal.
What's the average nightly rate in Portugal in 2026?
As of early 2026, the average nightly rate for short-term rentals in Portugal is approximately €110 to €130 ($115 to $135) in Lisbon and around €100 to €115 ($105 to $120) in Porto, based on AirDNA market data.
The realistic nightly rate range covering most short-term rental listings in Portugal spans from about €60 ($65) for basic studios in secondary locations up to €250 ($260) or more for premium apartments in historic centers or waterfront areas.
Between peak summer season and the January low season, Portuguese short-term rentals typically see nightly rate differences of €30 to €50 ($30 to $50), with savvy hosts adjusting prices dynamically to maintain occupancy year-round.
Is short-term rental supply saturated in Portugal in 2026?
As of early 2026, the short-term rental market in Portugal's major cities is highly competitive with significant supply density, particularly in Lisbon which has over 21,600 active listings and Porto with more than 13,300 listings according to AirDNA.
The number of active short-term rental listings in both Lisbon and Porto has been growing, which means new hosts face increasing competition and need stronger differentiation to achieve good occupancy rates.
The most oversaturated neighborhoods for short-term rentals in Portugal are the historic tourist cores: Baixa, Alfama, and Bairro Alto in Lisbon, plus Ribeira and the historic center in Porto, where listing density is extremely high.
Neighborhoods that still have room for new short-term rental supply in Portugal include emerging areas like Marvila and Beato in Lisbon, or Campanhã and parts of Vila Nova de Gaia near Porto, where tourism infrastructure is developing but competition remains lower.
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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 Portugal, 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 (Aviso n.º 23174/2025/2) | It's Portugal's official legal gazette, the definitive source for laws and regulations. | We used it to confirm the official 2026 rent update coefficient of 2.24%. We also used it to explain how rent increase caps work for existing leases. |
| Idealista (Rent Reports) | It's Portugal's largest property portal with transparent, monthly updated price indices. | We used it to calculate average rents per square meter across Portugal and major cities. We then converted these to monthly rent estimates by unit size. |
| Idealista (Sale Price Reports) | It provides consistent asking price data using the same methodology as the rent indices. | We used it to calculate gross rental yields by comparing rents to purchase prices. We used the same source for both metrics to ensure consistency. |
| Turismo de Portugal | It's the official public body that regulates Alojamento Local registration in Portugal. | We used it to explain the legal requirements for short-term rental licensing. We also used it to describe the RNAL registration process. |
| Portal das Finanças | It's the official Portuguese tax authority portal for landlord obligations. | We used it to explain lease registration and rent receipt requirements. We also used it to ground the compliance steps for foreign landlords. |
| gov.pt (Fiscal Representative) | It's the official government service page explaining fiscal representation rules. | We used it to clarify when non-residents need a fiscal representative. We also used it to explain the remote landlord compliance path. |
| AirDNA (Lisbon) | It's a globally recognized short-term rental analytics platform used by professional hosts. | We used it to estimate Lisbon's average occupancy rate and nightly rates. We also used it to assess market saturation through listing counts. |
| AirDNA (Porto) | It provides consistent STR metrics that allow city-to-city comparisons. | We used it to estimate Porto's short-term rental performance metrics. We also used it to compare Porto's market dynamics with Lisbon. |
| Diário da República (Lexicon: Caução) | It's an official legal definition linked directly to the Civil Code. | We used it to confirm the two-month deposit limit in Portugal. We also used it to keep deposit rules simple and verifiable. |
| Portal das Finanças (NIF Leaflet) | It's an official tax authority document explaining NIF requirements for foreigners. | We used it to explain the NIF requirement for non-resident property owners. We also used it to support the remote landlord setup section. |
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.