Apartment in Queluz e Belas

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Overview

2-bedroom, 1-bathroom apartment of 64 m² on the 1st floor, built in 1970, energy rating C. Located on rua Bastos Nunes, 63, Queluz e Belas parish, Sintra municipality, Lisbon district. Noteworthy Features: The apartment includes new double-glazed frames for improved insulation and a spacious entrance hall with recessed lighting, enhancing the modern aesthetic throughout. Location Highlights: Located on a quiet cul-de-sac, it's easily accessible to public transport and major roads connecting to Lisbon, Sintra, and Cascais.

Financial Summary

The valuation. The asking price of €265,000 sits significantly above the fair value of €153,628, representing an overpricing of €111,372, or 42.0% above what can be justified based on market conditions. Buy-to-flip angle. Given the elevated asking price and the condition of the property, a buy-to-flip strategy may yield limited returns unless market conditions improve significantly. Potential investors should carefully consider refurbishment costs before committing to a resale plan. Buy-to-let angle. With an estimated gross yield of 4.2%, the rental income strategy is promising, offering approximately €928 per month. This approach aligns well with long-term rental demands in the suburban areas surrounding Greater Lisbon, appealing to families seeking stable housing.

Valuation

Fair value modelled at €153,628 from the area baseline, adjusted for condition and location. Asking €265,000 sits €111,372 (42.0%) above — overpriced versus fair value.

Investment Thesis

Long-term rental The current pricing of €265,000 represents a 42% premium over the fair value of €153,628, resulting in an unattractive investment opportunity for long-term rental purposes. With a gross yield of only 4.2%, this property falls short of the expected returns required in a market characterized by greater Lisbon's economic activity. Family rental Priced at a significant gap from its fair value, this apartment does not offer compelling value for families seeking long-term accommodation options. The yield of 4.2% does not justify the elevated price in comparison to other available family-sized rentals in the surrounding areas. Buy-and-hold Given its overpricing, this property is not well-positioned for a buy-and-hold strategy, as the expected returns are diminished by the inflated acquisition cost. Holding onto this asset is unlikely to yield substantial appreciation given the market fundamentals in the suburban area of Greater Lisbon. Not ideal for short-term vacation rental The property’s high price relative to its fair value makes it an unsuitable candidate for short-term vacation rental efforts. The potential for revenue generation in this category is insufficient to cover the excessive investment. Not ideal for student housing With an overpriced listing and limited yield, this property would struggle to attract students seeking economically viable housing options. The market realities indicate that better alternatives exist at similar price points. Not ideal for luxury market This apartment fails to meet the luxury market expectations, especially with its significant overpricing compared to fair value. The lack of unique features and amenities further detracts from its appeal in the high-end market segment.

Risks

Economic Vulnerability With an economic stability score of 80/100 and a tenant stability score of 70/100, there is a risk that potential economic downturns could lead to increased vacancies and tenant turnover, impacting overall cash flow.

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