Only 2.5 hours away and enjoys more sunshine than California!
Where can you travel to that’s only 2.5 hours away from the UK, enjoys more sunshine a year than California, and is tipped as one of the top places to invest by “A Place In The Sun” magazine?
Answer: The Portuguese Algarve region.
The Algarve is Europe’s sunniest spot. It has 3000 hours of sunshine a year, tempered by moderate rainfall from November to March which provides the perfect environment to produce the region’s orange groves and almond trees, the scents from both fill the air when in bloom. Fresh oranges and almonds picked directly from the trees must be tasted to be believed. On the Algarve, they’re everywhere amongst the Moorish architecture which gives the region quite a different feel from neighbouring Spain.
The Portuguese people seem more relaxed, down-to-earth and generally friendlier than their Spanish neighbours (if you’ll excuse the generality).
Readers of my articles about overseas investment will know that I’m a great advocate of buying to attract the golfing classes to rent your property. The Algarve is famous for its well manicured, world class courses and lots of them – there are over 30 courses along the 100 mile stretch of The Algarve. The region also hosts major golfing competitions, creating a further attraction. It’s interesting, and somewhat galling for the Spanish, I’m sure, that Seve Ballesteros decided to build his signature course on the Portuguese side of the Rio Guadiana rather than on his native Spanish land!
Another tick in the box for the Algarve is the ease which it can be reached. Faro International airport is conveniently situated to the east of Central Algarve and is a maximum of 90 minutes drive from even the furthest point of the region. It’s served by 10 airlines flying out of the UK, from British Airways to the budget airlines – Ryanair, Easyjet, Monarch & Flybe, which means that it can also be an inexpensive trip. A further 17 airlines fly in from throughout the rest of Europe and beyond. Once you’ve arrived, car hire is also quick, easy and cheap.
Travelling from the Spanish border in the east to the westernmost tip of the Algarve is very straightforward if you stick to the motorway that spans almost the entire stretch. As you make the journey you’ll notice how the geography changes. The Eastern Algarve is greener than the west and less developed, retaining a feeling of the “real Portugal.” Investment-wise, I believe there is capital growth to be found, but it may take some time as long-term projects such as the redevelopment of Tavira town centre have yet to happen and then take effect. Of course, if you’re looking to invest for rental income you need to buy where there’s greatest demand right now and you may find a property in this area less desired by holidaymakers as there is, as yet, less in the way of entertainment.
It’s possible to swing too far the other way. The area between Quinta do Lago, Vale do Lobo & Almancil is at the other end of the spectrum. Known as the “golden triangle,” it’s where “footballers’ wives” meets the upmarket tourist, boasting almost everything any holidaymaker could want with an abundance of shopping centres, golf courses, restaurants and hotels. It’s also extremely close to Faro airport. The only thing that’s missing is… character. Each new luxury development (they’re all “luxury” developments in this area, with the price tags to prove it!) looks much like the next which has created a sterile environment that keeps the real Portugal firmly locked out. When you’re in the golden triangle, you really could be anywhere with sun and cocktails. The amount of new development all round here make it difficult to find real value for the investor. I believe there’s a danger of too much competition if you’re relying on rental to cover the mortgage payments on your holiday home.
Pretty much right in the middle of the Algarve coastline sits Albufeira. In my opinion, and it’s one that is shared by many locals, this is the one blot on the Algarve’s copybook. Although now a busy holiday town that attracts many visitors, it represents Portugal’s venture into Costa del Sol territory in terms of overbuilding. As a holiday destination, it could be considered a success, attracting young families and singles looking for a good time in the abundance of English bars. It also served as a warning to planners as to how concrete jungles can grow if permissions aren’t kept in check. You’ll spot Albufeira as you travel west – you really cannot miss it, it’s huge! Whilst cheap properties come on the market in this town, there’s a great deal of competition from a rental perspective and, I suspect, little capital growth to be had.
Further west you’ll find the scenic Portugal of the picture postcards. Here there are rugged coastlines with cliff top outlooks and beautiful rock formations. Classic arches and coves frame beautiful long stretches of sparsely populated sand and grilled sardines on the beach are a speciality of the region that even traditional non-fish eaters seem to relish.
The motorway ends around Lagos and then you’re back on regular roads that will take you all the way to Sagres and Cabo de S. Vicente. This is the south-westerly tip of Portugal where you’ll see windsurfers gathering to make good use of the swell. All of this area is nature reserve which means no building and hence limited supply. As investors, that’s what we want to hear! Backtracking a little, before we reach this protected area, the final town is the lovely Praia du Luz – unfortunately now famous as the last known location of Madeleine McCann. In spite of this, Praia du Luz remains a truly lovely village with much to offer. From an investment perspective, it’s not overbuilt, nor is it in danger of becoming so due to the surrounding national parkland. Properties tend to rent and sell very well and this fact, along with constrictions on build, has kept prices rising, ensures good rental demand and strong capital growth projections.
The downsides to buying in Portugal are (a) getting a mortgage from the conservative banks and (b) the amount of deposit needed.
I’ve sourced some larger than average apartments in very attractive developments in and around Praia du Luz and only 14 weeks’ rental per annum will cover the annual mortgage payments. The best part is that the developer will fund the deposit and many of the costs making this a classic No Money Down deal. Whilst this is something we’ve enjoyed when buying in the UK, it’s not so easy to find on The Algarve.
In addition, I have a great broker who will go through finances with you to get you qualified for a local mortgage.
So if the region appeals to you for a holiday home or investment (or both), let me know and I’ll put you in contact with my agent so you can visit and check this out for yourself.
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