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

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Overview

3-bedroom, 0-bathroom apartment of 200 m², energy rating D. Located Algés, Linda-a-Velha e Cruz Quebrada-Dafundo parish, Oeiras municipality, Lisbon district. Noteworthy Features: The apartment boasts a spacious 40m² terrace ideal for entertaining, along with a dedicated parking space for enhanced convenience in a bustling neighborhood.

Financial Summary

The valuation. The asking price of €1,250,000 sits significantly above the fair value of €1,056,109, indicating an overvaluation of €193,891 (18.4%). This pricing suggests that potential investors may be paying a premium in this market. Buy-to-flip angle. Given its current condition, the buy-to-flip strategy may not be viable, as the substantial investment required to renovate this 200m² apartment could exceed potential resale returns. Therefore, flipping may not yield positive profit margins. Buy-to-let angle. With an estimated gross yield of 2.5% and monthly rental income around €2,604, the buy-to-let strategy offers modest returns, appealing mainly to investors seeking long-term rental opportunities in a stable suburban area near Lisbon.

Investment Thesis

Long-term rental This 3-bed apartment in Algés, while located in a suburban area with a strong neighbourhood score of 78, is currently priced at €1,250,000, which represents an 18.4% premium over its fair value of €1,056,109. The yield of 2.5% gross is not compelling enough given the property’s condition, rated at 0/100, making it less attractive for investors focused on long-term rental income. Family rental Although the property's location near Lisbon's amenities and educational institutions could attract families, its listing price reflects an 18.4% gap from fair value, indicating that it is overpriced at €1,250,000. The current yield of 2.5% gross further diminishes its appeal for family rentals, as investors could find better options elsewhere. Buy-and-hold Investing in this 3-bed apartment as a buy-and-hold strategy appears less favorable due to its current listing of €1,250,000, which exceeds the fair value by 18.4%. With a yield of only 2.5% gross and a concerning condition rating of 0/100, this property does not align with ideal long-term investment criteria. Not ideal for short-term vacation rental Given its suburban location and lack of appeal based on its current price, this apartment is not a suitable choice for a short-term vacation rental strategy. Its rated neighborhood quality and low condition further suggest that it would struggle to attract short-term guests. Not ideal for luxury market The apartment's price point of €1,250,000 may suggest a position within the luxury market; however, it does not meet the standards commonly expected in this segment due to its condition rating of 0/100 and being overpriced compared to its fair value. Investors should reconsider this property when targeting the luxury market due to its evident shortcomings.

Risks

Economic downturn risk Despite a strong economic stability score of 80/100, any unforeseen economic downturn could negatively impact rental income and tenant stability, which is currently also at 80/100.

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