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.
0-bedroom, 0-bathroom mix_use_building of 506 m². Located on rua das Mercês, Funchal (Sao Pedro) parish, Funchal municipality. Noteworthy Features: Direct street access to a 350 m² commercial basement space, providing extensive possibilities for modern restoration or development in a prime Funchal location.
The valuation. The asking price of €1,200,000 is significantly below the fair value of €1,370,166, presenting a potential opportunity for investors as it is underpriced by €170,166 (14.2%). Buy-to-flip angle. The property’s current condition allows for substantial renovations which could attract immediate sales, leveraging the fair value discrepancy to realize profits upon resale. Buy-to-let angle. Located in a tourist-friendly area of Funchal, the property could be converted for short-term vacation rentals, potentially generating strong annual income given the neighborhood's mixed-use appeal and low crime rate.
Fair value modelled at €1,370,166 from the area baseline, adjusted for condition and location. Asking €1,200,000 sits €170,166 (14.2%) below — the upside to fair value.
Asking €1,200,000 versus the rua das Mercês area baseline of €1,521,036 (€3,006/m²) for a median-condition unit of this size — the gap before quality adjustments.
AI Condition Index 25/100 (Condition 18 · Materials 30 · Room dimensions 30). Below-median condition lowers fair value versus a renovated baseline unit.
Neighbourhood score 75/100 (Housing Market 85 · Amenities 75 · Economic 70 · Tenant Quality 70). Strong amenities and housing-market momentum support a premium to baseline.
rua das Mercês
Area baseline €1,521,036 + condition -€399,266 + location +€160,857 = modelled fair value of €1,370,166 (€2,708/m²), a €170,166 (14.2%) gap versus the €1,200,000 asking price.
| Reference | Status | Price | €/m² | vs subject | Condition | Location |
|---|---|---|---|---|---|---|
| rua das Mercês | Subject | €1,200,000 | €2,372 | — | 18 | 75 |
| travessa do Forno, 19 | Active | €395,000 | €1,975 | 16.7% | — | 66 |
| rua da Ponte Nova, 31 | Active | €499,000 | €2,683 | 13.1% | 40 | 69 |
| rua da Queimada de Cima, 32 | Active | €1,195,000 | €2,464 | 3.9% | 25 | 68 |
| rua Doutor Ângelo Augusto da Silva | Active | €900,000 | €2,045 | 13.7% | 60 | 65 |
| Median comp | €699,500 | €2,255 | 4.9% | 40 | 67 |
Short-term vacation rental Funchal's expanding tourism sector supports strong demand for short-term vacation rentals, making this property appealing for such investment. While it currently has a gross yield of 0%, the property's fair value suggests a 14.2% potential upside based on market dynamics. Long-term rental The favorable neighborhood rating of 75/100 indicates that this property is well-suited for long-term rentals, appealing to stable tenants. With a fair value exceeding the asking price, investors can anticipate both solid occupancy and rental appreciation over time. Family rental Given its low crime rate and good amenities, the property is positioned favorably for family rentals, which are in demand in the area. The prospect of a slightly lower-than-market price presents a prime opportunity for families seeking long-term housing in Funchal. Not ideal for student housing The property’s condition score of 25/100 does not align well with the expectations of the student housing market, which typically seeks well-maintained properties. This mismatch eliminates the strategy as a viable option despite the property’s otherwise strong location. Not ideal for luxury market The overall condition of the building and its pricing suggest it does not fit the luxury market segment effectively, where higher quality and more premium offerings are required. With a rating of only 25/100 for condition, this strategy is unlikely to yield the desired luxury return on investment.
Economic Tenancy Risk The combined economic and tenant stability scores of 70/100 indicate a moderate risk of inconsistent rental income, potentially affecting cash flow.
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Comparables, condition and location workings, yield and time-to-sell. Written up and emailed to you.
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