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Top 10 Mistakes When Renting a Property in Portugal

Renting a property in Portugal can be an exciting venture, but without the right knowledge and preparation, you can easily find yourself tripping into common pitfalls. From overlooking crucial documentation to miscalculating rental costs, these are the top 10 mistakes people often make when they choose to long-term rent in Portugal.

Frederik Pohl
Frederik Pohl, CEO
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1. Ignoring Necessary Documents

One of the most common and significant mistakes made is overlooking the need for necessary documents. You must ensure you have your NIF (Portuguese Tax Number) ready and an energy certificate for your property. This certificate verifies the energy efficiency level of your property and is required by law. Neglecting to procure these documents can lead to fines between 250 and 3,740 euros.

2. Poor Rent Evaluation

People often miscalculate the rental price due to inadequate research on the regional and national real estate markets and disregarding the monthly expenses related to the property. This can result in a financial burden or could deter potential tenants due to high rental charges.

3. Failing to Advertise the Property Effectively

Undervaluing the importance of marketing your property is a mistake. Failing to describe the property adequately or not using quality photos could result in fewer inquiries. Remember to detail the rental terms and conditions explicitly.

4. Overlooking ‘Mais Habitação’ Tax Benefits

In 2023, Portugal introduced the ‘Mais Habitação’ habitation program that includes various tax benefits for landlords who register their properties under the Affordable Rent Program. Ignoring these advantages could result in significant financial losses.

5. Not Screening Tenants Thoroughly

An often overlooked step, failing to screen potential tenants thoroughly can lead to future issues. It’s essential to evaluate prospective tenants’ financial conditions and character, check their employment status and ask for references.

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6. Mishandling the Rental Contract

With rentals in Portugal, it’s essential to include necessary clauses in the rental contract, such as the identification of all parties, payment schedule, lease purpose, term of the contract, rent amount, and security deposit details. Failing to communicate the contract to the Tax Office by the end of the first month of the lease can lead to penalties.

7. Neglecting Landlord Duties

Once the tenant moves in, the landlord must manage the rental efficiently. This includes collecting rent payments, addressing maintenance or repair issues, and adhering to legal requirements or regulations. Negligence in these duties can strain the tenant-landlord relationship and even lead to legal complications.

8. Improper Contract Termination

Upon termination of the contract, you must communicate it via the Finance Portal. Many landlords make the mistake of overlooking this crucial step.

9. Failing to Inspect the Property

Before and after the termination of the lease, it’s crucial to conduct a thorough inspection of the property. Ignoring this can lead to unnoticed damages, which can later turn into substantial repair costs.

10. Being Dishonest or Disrespectful

Some landlords make the mistake of not being entirely honest about the condition of the property or not respecting the tenant’s privacy. This could harm your reputation as a landlord and affect future rentals.

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Renting Out your Property

Looking to rent out your property in Portugal and become a landlord? We have assembled a guide to help you with the entire process

By avoiding these common mistakes, you can ensure a smoother and more profitable experience when renting out a property in Portugal. The key is to stay informed, respect your duties and responsibilities as a landlord, and maintain open and honest communication with your tenant. Happy renting!

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