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How to Find Property Management in Portugal

Updated: July 22, 2024
By: David Afonso

In the fast-paced and dynamic Portuguese real estate market, the necessity of efficient property management has escalated to a crucial level for both local and international property owners and investors. Hiring a property management company in Portugal makes life easier for homeowners by taking care of daily tasks, optimizing profitability and ensuring regulatory compliance in an ever-evolving environment.

In this guide, we will explore in detail what these companies do, why they are so helpful in the current context of Alojamento Local (AL) growth, the pros and cons of hiring their services, where they operate, the costs involved, and what to consider when choosing one.

Frederik Pohl
Frederik Pohl, CEO
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What does a property management company do in Portugal?

A property management company in Portugal is responsible for managing properties on behalf of the owners. Its services range from rental management, maintenance, and repairs to the administration of neighborhood communities. Here are the main functions:

  • Rental Management: includes the search and selection of tenants, drafting contracts, collecting rents, and resolving problems that may arise between owners and tenants.
  • Maintenance and Repairs: Supervise the necessary repairs and routine maintenance of the property to ensure it is in optimal condition.
  • Condominium Management (Apartments): Manage your part in the building’s accounting and finances, meeting calls, executing agreements, and complying with current regulations.
  • Legal Advice: Assistance in legal matters related to the property, such as disputes with tenants or property issues.

Why is a property management company useful?

By hiring a house management company, you can add significant value to your rental property investments, which is why many experienced real estate investors agree that working with a good management company is best. Here are several reasons to do it:

  • Time and Stress Saved: Property management is a demanding task. By entrusting these responsibilities to a management company, you can reclaim your time and significantly reduce the stress associated with property ownership.
  • Market Knowledge: These companies have a deep knowledge of the real estate market in Portugal, which is beneficial for setting competitive rental prices and finding good tenants.
  • Legal Compliance: Property management companies play a crucial role in ensuring that all property operations adhere to local and national laws. This proactive approach helps to avoid potential legal problems, providing peace of mind for property owners.
  • Improved Profitability: These companies can increase the property’s profitability through efficient management and proper maintenance.
  • Alojamento Local growth: According to the latest study presented by the association, the number of sleepers in Alojamento Local (AL) exceeded 11 million in 2023. So, suppose you’re about to start or invest in an AL business. In that case, most property management companies in Portugal have a service regarding this sector. There’s an opportunity to explore it!

Pros and Cons of Hiring a Property Management Company in Portugal

Pros
Finding tenants for you

A property management company can handle the marketing for you and your property, placing ads and screening calls from potential tenants. When someone responds that they fit the ratings you’ve given the property management service, the company will call you!

Act as your link

If you hire a real estate management company in Portugal, they fill the position of communication with the tenant/s. Plus, they are the ones who file complaints and take care of requests for repair or maintenance, instead of this being all up to you.

Manage finances

Suppose dealing with the financial aspects of being a landlord in Portugal doesn’t appeal to you, or you think it would be better for someone else to handle this part of your business. In that case, a property management company might be right for you. Professional property managers collect rent, deposits, and any late fees that may occur. No more having to remind tenants about a late payment!

Knowledge of local laws

Because there are specific laws for rental properties, hiring a property management service may be your ticket to a greater understanding of these laws for your benefit. Having a professional on your side can be a huge help and also help you avoid potential legal mistakes when managing your rental property.

Well connected

Any company worth mentioning likely has connections to other professionals and groups in their area. When you need to hire someone for a repair, upgrade, or replacement, your partner can recommend someone they know or have worked with before, helping you get the job done right the first time.

Cons of hiring a property management company

The selection process may lack rigor

One key to finding and retaining good guests or tenants is implementing a screening process, especially since the owner may never meet the guest if the property manager makes all the arrangements.

Flotation cost

The main downside of hiring a professional property management company is the cost. Many owners will only sign with these companies if they worry that it will affect their profit margin slightly more than they would like.

Trust and Liability

It is crucial to find a trustworthy company. A poor choice can result in poor management and property problems. To avoid this, try to look for for reviews online and talk to different people before making a decision.

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Dogs are very well-loved in Portugal

Types of Properties a Property Management Company can take care of in Portugal

Property Management Companies exhibit versatility by overseeing various property types in different locations to ensure efficient operation and optimal value.

In the residential sector, they expertly manage single-family homes, apartments, multi-family homes, and building condominiums. They strongly focus on tenant relations, maintenance, and administration of lease contracts, providing property owners peace of mind. Commercial property management extends its expertise to coworking spaces, meeting the unique needs of companies in shared environments. Short-term rentals encompass vacation rentals and hotels (i.e., Alojamento Local), where these companies excel in guest experiences, reservations, and property maintenance.

Costs of hiring a property manager in Portugal

The costs of hiring property management vary depending on several factors, including location, property type, and services required. Below are some typical costs:

  • Management Fees: These are typically a percentage of the rental income, ranging from 20% to 25%, offering a fair deal for the services provided.
  • Leasing Fees are an additional cost for finding and selecting tenants, which may be equivalent to one or two months’ rent.
  • Maintenance Fees: Some maintenance services may be included, while others, like a concierge service, may have additional costs.
  • Emergency Fees: These are charges for managing emergencies or urgent repairs, ensuring that your property is always safe.
  • Condominium Administration Fees: If the property is an apartment or part of a neighborhood community, there are additional management fees.

What to Consider When Hiring Property Management in Portugal

  • Reputation: It’s crucial to thoroughly investigate the company’s reputation, looking for references and reading opinions from other clients. This will help you feel more secure in your decision-making process.
  • Experience: Evaluate the company’s expertise in managing properties similar to yours.
  • Services Offered: It is essential to ensure that the services offered match your specific needs. This will assure you that the company is suitable for your property management requirements.
  • Cost Transparency: Completely understand all fees and associated costs before signing a contract.
  • Communication: Ensure the company communicates clearly and can answer your questions and concerns.
  • Clear Contract: Review the contract carefully to understand the terms and conditions and ensure that all responsibilities are clearly outlined.
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A cat enjoys the sun on Village Marina

FAQ – Frequently Asked Questions

Yes, many property management companies in Portugal are used to working with owners residing abroad. They offer services that allow remote property management, including periodic reports and constant communication via email or telephone.

Property management companies can offer assistance in meeting tax obligations, such as filing rental income taxes and other local taxes. It is advisable to consult a tax advisor to obtain a complete understanding of your tax responsibilities.

Property management companies are responsible for resolving issues with tenants, from minor disputes to eviction proceedings if necessary. This includes conflict management and representing the owner in legal proceedings, if necessary.

Many property management companies also offer real estate sales services. They can help you evaluate the value of your property, find potential buyers, and manage the sales process.

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