Apartment in Algés, Linda-a-Velha e Cruz Quebrada-Dafundo

Overview

3-bedroom, 3-bathroom apartment of 168 m², built in 2009, energy rating C. Located on avenida Marginal, 4, Algés, Linda-a-Velha e Cruz Quebrada-Dafundo parish, Oeiras municipality, Lisbon district. Noteworthy Features: This top-floor apartment benefits from abundant natural light through large windows and provides a panoramic sea view from both the living room and balcony.

Financial Summary

The valuation. The asking price of €1,375,000 is significantly above the fair value of €864,122, representing a gap of €510,878 or 37.2%. This property is overpriced according to market standards. Buy-to-flip angle. Given its luxurious finish, a buy-to-flip approach could capitalize on cosmetic upgrades for quick resale in a stable market, aiming for a substantial profit margin. Buy-to-let angle. The rental income strategy would yield a gross yield of approximately 1.8%, offering estimated monthly rent of €2,063, positioning it as a long-term family rental in a suburban Lisbon neighborhood.

Valuation

Fair value modelled at €864,122 from the area baseline, adjusted for condition and location. Asking €1,375,000 sits €510,878 (37.2%) above — overpriced versus fair value.

Investment Thesis

Long-term rental The gross yield of 1.8% indicates that the property is not performing well in terms of rental income compared to its purchase price. Additionally, with the market conditions suggestive of a suburban location impacting tenant quality, this strategy appears compromised given the current valuation. Buy-and-hold While buy-and-hold strategies typically benefit from property appreciation over time, the current price significantly exceeds fair market value by 37.2%. This overvaluation jeopardizes potential returns and undermines the long-term viability of this investment approach. Family rental Although family rentals can often yield stable returns, this property’s pricing places it out of sync with its fair value and rental performance metrics. The suburban location further complicates demand for family units, suggesting that the investment is unlikely to yield satisfactory returns. Not ideal for: Short-term vacation rental, Luxury market, Student housing The high price tag coupled with low gross yields makes this property unsuitable for short-term vacation rentals and the luxury market, both of which thrive on strong demand and versatility. Furthermore, the suburban setting and pricing dynamics do not align well with the typical needs of student housing investments.

Risks

Economic Dependence The property may face challenges in tenant retention and revenue generation due to its economic stability score of 80/100, indicating potential vulnerability to economic downturns. Tenant Relocation Risk With a tenant stability score of 75/100, there exists a moderate risk of increased turnover, possibly leading to periods of vacancy and associated income loss.

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