Apartment in Albufeira e Olhos de Água

Overview

2-bedroom, 2-bathroom apartment of 55 m², built in 1993, energy rating E. Located on rua Teixeira de Pascoais, Albufeira e Olhos de Água parish, Albufeira municipality, Faro district. Noteworthy Features: The apartment boasts dual balconies offering extensive outdoor space and is conveniently located just 1.8 km from Santa Eulália Beach, enhancing its appeal for beachgoers.

Financial Summary

The valuation. The asking price of €340,000 is significantly above the fair value of €245,746, presenting an overpriced situation with a premium of €94,254 (27.7%).

Investment Thesis

Short-term vacation rental The property in Albufeira e Olhos de Água is overpriced, trading at €340,000 compared to a fair value of €245,746, leading to a significant gap of 27.7%. As a result, the 3.4% gross yield may not justify the premium, particularly in a seasonal market driven by tourism. Buy-and-hold Given the current overvaluation at €340,000, with a fair value of €245,746, the property presents a challenging investment for long-term holding strategies. Additionally, the moderate neighborhood score of 70/100 suggests limited appreciation potential in an area reliant on seasonal employment. Value-add renovation Despite being in good condition with a score of 81/100, the property is overpriced at €340,000, compared to a fair value of €245,746. Investing in renovations may not deliver the necessary returns given the existing gap in valuation and the competitive, seasonal rental market of the Algarve.

Risks

Economic Vulnerability With an economic stability score of 65/100, this property is susceptible to economic downturns which could impact rental demand and income consistency.

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