ALGARVE – THE PLACE TO BE SIMPLY HAPPY
Profit Potential in an Old World Haven
By Ronan McMahon
Orange trees stretch their branches in shady plazas. Whitewashed buildings with wrought-iron balconies fill narrow cobblestone streets. Every lane invites you to meander, every café says sit and stay a while.
You stick your head into doorways and wander into cool courtyards to find echoes of North Africa and classical Rome…
Founded by Phoenician traders, the town of Tavira once had mighty walls. The Moors ruled from the 8th to 13th centuries leaving their mark in art, architecture, and the town’s name.
As members of my Real Estate Trend Alert already know, the Algarve is one of Portugal’s two most popular tourism destinations (Lisbon being the other one). And Tavira is not only among the Algarve’s most charming towns, it’s also one of the places where I see the prospect for biggest tourism growth and appreciation.Tavira is just 35 minutes’ drive east of Faro international airport along Portugal’s Algarve coast…and it’s here that the Path of Progress halted in the wake of the 2008/09 financial crisis.
Portugal has one of the fastest growing tourism markets on my global real estate beat…and it shows no sign of slowing down anytime soon. Already a mainstay of European tourism in the 1990s and 2000s, the past decade has seen the country’s tourism growth start to accelerate year on year. Visitor numbers have increased for eight years in a row, last year was another record-breaker with 12.8 million visitors to the country. (Over 4 million of them visited the Algarve).
Since 2012 the country has become a safe haven for international investors lured by the Golden Visa and the promise of a safe place to park their money. It means that with an investment in real estate you could have visa-free travel throughout the 26 countries of Europe’s Schengen Zone.
When development first came to the Algarve, it rolled out west of Faro, where the international airport is, toward Vilamoura. That’s where the major resorts, golf courses, hotels, and condo communities first developed, before moving farther west towards Lagos.
Two Paths of Progress are sweeping east and west from Faro on Portugal’s Algarve.
East of Faro was overlooked, despite the fact that it’s where you have some of Europe’s finest beaches and a more traditional and charming Portuguese feel. That’s especially true of Tavira, which was on its way to becoming a firm tourist favorite before recession hit.
In 2007/2008, just as the real estate market peaked, developers were homing in on the underdeveloped beach towns east of Faro, particularly in Cabanas, just a 10-minute drive from Tavira.
Then, crisis hit, and the area managed to stay under the radar and relatively undiscovered.
But as Portugal has recovered, people are starting to discover the eastern Algarve around Tavira and Cabanas—particularly well-heeled vacationers. Besides a lot of history and culture there are some incredible beaches close by. To get to them, you have to take a water taxi. (Watch out for flamingos en route.)
That sort of appeal creates an opportunity…more on that here.
In the rest of the Algarve, they’re used to packing families in for the summer season. Then, in the off-season, they almost give the place away to break even. But the area around Tavira appeals to a broad cross-section of tourists (including families). Tourism comes from across Europe, with Scandinavians, French, Swiss, German, and others, along with the British and Irish. Cabanas will get the shoulder season traffic…golfers, retirees, and other renters throughout the year.
More than any country in Western Europe, I’ve been drilling down into Portugal. In the last few years I’ve spent many months scouting here.
I’m personally shopping for a property on Portugal’s Algarve.
With 300 days of sunshine a year, stunning beaches, and world-class golf, Portugal’s Algarve attracts millions of tourists each year.
I aim to rent in the red-hot high-season, banking big rental income and at other times of the year spend time there enjoying everything the Algarve offers.
I’m planning on using the miracle of leverage—just as I recommend you do.
Portuguese banks are lending as much as 80% at rates of as little as 1.5% to North Americans…your repayments are tiny…think €540 a month or even less…
I love the Algarve’s perfect Mediterranean climate. It’s a place of rich culture, great food…soaring cliffs, white-washed villages, secret coves…and it’s among the safest corners of the world today.