Renting a house: What is it and is it worth buying to rent?
What does the concept of leasing mean? Does it differ from renting? And is it worth buying a house to rent out? We answer all these questions in this article.
To access specific and direct answers about renting or buying a house, contact the real estate agents at Casa no Minuto or the credit intermediaries at Poupança no Minuto for free. If your questions are related to the above, we will explain shortly thereafter.
What does renting a house mean?
Rent refers to a type of lease contract regarding an immovable thing, such as an apartment or a store, as can be read in a publication from Notícias ao Minuto.
"When the contract has an immovable object as its object, it is called a lease, which is the contract by which one party (the landlord) undertakes to provide the other (tenant) with the temporary enjoyment of an immovable object, in exchange for pecuniary consideration, usually periodic (rent)," explains the information platform.
What's the difference between leasing and renting?
But many confuse the term lease with rent. The two concepts do not refer to the same thing: they are both legal, but, unlike leasing which is for real estate, renting refers to movable items.
It is possible to rent objects temporarily such as a car or various equipment, but not real estate. Notícias ao Minuto clarifies, renting "is a contract by which one party undertakes to provide the other with the temporary enjoyment of a movable thing, in exchange for a fee".
How profitable is buying a house to rent?
Rental property has the main purpose of housing. However, it can also be seen as an investment. Does buying a house to rent out compensate for the costs of acquisition and taxes?
The numbers don't lie and show that yes: According to a publication from Notícias ao Minuto, "buying a house and renting it out yielded 7.5% in the third quarter, with profitability rising in the last year".
According to a statement accessed by Notícias ao Minuto, in Portugal, the gross profitability of buying a house "to put it on the rental market was 7.4% in the third quarter of 2023, about 1.4 percentage points (p.p.) higher than calculated for the same period in 2022 (5.9%)".
What this means is that housing profitability was 1.6 percentage points higher than in the second quarter of 2021, equivalent to 5.7%.
Rental profitability by areas
And in which area of the country does it make more sense to buy a house for renting out? The data points to Santarém.
"Analyzing by district capitals, it is in Santarém where buying a house for investment is most profitable, with a return of around 7.9%." According to data from Notícias ao Minuto, the city of Évora follows with 7.5%, Leiria with 7%, Coimbra with 6.5%, Braga with 6.3%, Aveiro with 6.2%, Setúbal with 5.8%, and Porto with 5.8%.
Where profitability is not as high: in Lisbon with 4.7%, Faro with 5%, Viana do Castelo with 5.1%, Funchal with 5.5% and Viseu with 5.5%.
Buying a house to rent? Ask for help from a credit intermediary.
Are you considering moving forward with one of these assets and investing in the real estate market? According to the data, it may be a good time for this investment. And you can do it, even by buying property to rent through a home loan.
Consult a credit intermediary to clarify all your possible doubts, and have access to free and personalized support throughout the entire process of buying a house with financing.
The intermediary agents of Poupança no Minuto are available to help you in all phases: Contact us and let's move forward with the profitability of your finances!