Apartment in Baixa da Banheira e Vale da Amoreira

Overview

1-bedroom, 1-bathroom apartment of 56 m² on the 3rd floor, energy rating E. Located on rua Presidente Manuel Teixeira Gomes, Baixa da Banheira e Vale da Amoreira parish, Moita municipality, Setúbal district. Noteworthy Features: This apartment boasts a newly replaced plumbing and electrical system, ensuring long-term maintenance efficiency and modern convenience for everyday living.

Financial Summary

The valuation. The asking price of €220,000 sits €15,200 (6.5%) below the fair value of €235,200, indicating the property is fairly priced. This suggests a reasonable investment opportunity without excessive premiums. Buy-to-flip angle. The buy-to-flip strategy focuses on minor renovations to enhance appeal and resale value, potentially capitalizing on the property’s location in a growing suburb of Lisbon. Targeting a price point above €235,200 could yield substantial returns. Buy-to-let angle. The buy-to-let strategy would generate approximately €587 in monthly rental income, resulting in a gross yield of 3.2%. This can be attractive for long-term family rentals in a suburb known for its safety and residential appeal.

Valuation

Fair value modelled at €235,200 from 5 comparable sales in the area. Asking €220,000 sits €15,200 (6.5%) below — the upside to fair value.

Investment Thesis

Long-term rental The apartment's fair value of €235,200 compared to its listing price of €220,000 indicates that it is aligned with the current market conditions, making it a viable option for long-term rental. With a gross yield of 3.2%, it may provide steady returns without significant capital appreciation potential in this suburb of Lisbon. Buy-and-hold While the property listing is at a fair value, the 6.5% gap suggests that immediate investment upside is limited. Holding onto the property could still generate consistent income through long-term tenants, given the neighborhood’s respectable ratings of 73/100 for condition and amenities. Family rental The apartment's suburban location offers a safe environment with good amenities, making it suitable for family rentals despite a fair pricing position at €220,000. Potential tenants may appreciate the balance between a manageable purchase price and the quality of life that a suburban setting provides. Not ideal for luxury market The property does not cater to the luxury market, as its fair value and condition ratings do not align with high-end expectations. Therefore, targeting this segment would likely result in an inability to capitalize on demand and optimize rental yields. Not ideal for short-term vacation rental Given the fair valuation and the apartment’s condition, it lacks the characteristics that typically attract short-term vacation renters looking for unique urban experiences. The stability of the suburban environment does not lend itself well to transient rental strategies. Not ideal for student housing While there is a residential atmosphere in the suburban area, the property's fair value suggests limited appeal to student renters who may seek more vibrant, city-center accommodations. Additionally, the potential yield does not justify the investment in a niche market that prioritizes accessibility and life style dynamics.

Risks

Tenant turnover risk With a tenant stability score of 68/100, there is a potential risk of increased tenant turnover which could negatively impact rental income stability and increase vacancy costs.

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