This listing includes AI condition scoring, neighbourhood intelligence, and market valuation data — giving you a complete picture before you visit. Compare rental yield, price per square metre, and location strength against the broader Portuguese market to assess whether this property fits your investment strategy.
2-bedroom, 2-bathroom apartment of 95 m². Located on rua 25 de Abril, 5, Luz parish, Lagos municipality, Faro district. This property offers a remarkable investment opportunity with an active Local Accommodation License (AL) and a proven track record of high profitability for vacation rentals.
The valuation. The asking price of €420,000 is significantly above fair value by €247,358, translating to a 58.9% premium. This positions the property as overpriced, suggesting potential challenges in achieving an appealing return on investment.
Fair value modelled at €172,642 from the area baseline, adjusted for condition and location. Asking €420,000 sits €247,358 (58.9%) above — overpriced versus fair value.
Asking €420,000 versus the rua 25 de Abril, 5 area baseline of €428,545 (€4,511/m²) for a median-condition unit of this size — the gap before quality adjustments.
AI Condition Index 82/100 (Condition 78 · Materials 85 · Room dimensions 80). Above-median finish quality lifts fair value versus a baseline unit needing CapEx.
Neighbourhood score 63/100 (Housing Market 80 · Amenities 60 · Economic 60 · Tenant Quality 55). Strong amenities and housing-market momentum support a premium to baseline.
rua 25 de Abril, 5
Area baseline €428,545 + condition +€10,539 + location +€8,013 = modelled fair value of €172,642 (€1,817/m²), a €247,358 (58.9%) gap versus the €420,000 asking price.
| Reference | Status | Price | €/m² | vs subject | Condition | Location |
|---|---|---|---|---|---|---|
| rua 25 de Abril, 5 | Subject | €420,000 | €4,421 | — | 78 | 63 |
| Luz · 28b9cd | Active | €435,000 | €2,825 | 36.1% | 75 | 70 |
| São Gonçalo de Lagos · 28b67a | Active | €425,000 | €3,972 | 10.2% | 75 | 72 |
| Luz · f35f5f | Active | €465,000 | €5,813 | 31.5% | 72 | 76 |
| beco da Hortinha, 7 | Active | €175,000 | €7,292 | 64.9% | 72 | 64 |
| Median comp | €430,000 | €4,893 | 10.7% | 74 | 71 |
Short-term vacation rental While the potential for short-term vacation rentals in a tourist-heavy location like Luz is appealing, the apartment's current pricing at €420,000 creates a significant barrier to profitability. The estimated gross yield of 3.8% is insufficient to justify the 58.9% gap from its fair value of €172,642 and makes the investment less attractive. Buy-and-hold Investing in a buy-and-hold strategy for this apartment is unwise given its overpricing, which fails to align with the fair value of €172,642. With a gross yield of only 3.8%, the potential for favorable long-term returns is greatly diminished due to the current market value being 58.9% higher than it should be. Family rental Although family rentals can thrive in family-friendly neighborhoods, this property is priced at €420,000, greatly exceeding its fair value of €172,642. The appealing gross yield of 3.8% is overshadowed by the fact that the market price is 58.9% inflated, posing a poor investment opportunity for securing stable long-term rental income.
Economic Vulnerability The economic stability score of 60/100 indicates potential susceptibility to downturns, while the tenant stability score of 55/100 suggests higher risk of tenant turnover, impacting cash flow irregularities.
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