# maths details for vacation rental Albufeira



## judyw. (Feb 10, 2017)

Hi everyone,
I am trying to find out the detailed costs for a vacation rental in Albufeira area before investing.

I found info about taxes but hardly anything about utilities, occupancy rate and overall if anyone is making money.

My investment : up to 100,000 euros so most likely studio or 1 bedroom apt

If you own a property in the Algarves, could you help me out and give me an estimate 
for followings:

occupancy rate 
property management
Electricity
water
repairs
maintenance
garbage
tv channels suscriptions
internet connection

Also, I am concern about renters leaving Ac/heater on all day (and they probably do) , in this case, any energy efficient suggestions for AC/Heater : for instance, a system that would turn everything off when they leave the apt or open a window/door, like we can find in hotels.

Thanks for your input.
J


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## MrBife (Jul 26, 2009)

Its personal opinion and others may have different feelings ...

Algarve is largely a family holiday venue now - not much call for Studio Apartments or 1 Bed as couples would go to an hotel or an apartotel where someone makes the beds and made them breakfast.

Summer season is not much more than 10 weeks - rental outside that time is either a bonus or at cost to keep the place aired. So occupancy is 25% for your calculations

Property Management 80 a month
Electricity 100 a month when occupied 20 when not
Water 25 a month - average
Repairs - your guess as good as any - same as in France probably
Maintenance - depends on condition and use - again your guess - use France as a basis
Garbage - Included in Water
TV via IPTV paid service - 15 a month (free options possible via Kodi powered device)
Internet with no data cap - 25 a month to 40 a month dependent on provider selected

Occupancy sensor to switch off AC - 50 per unit

All values in €

No one makes money from renting a Studio or T1 - capital growth is the only benefit if you are lucky but cost of selling + Capital Gains Tax could wipe that out.


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## judyw. (Feb 10, 2017)

MrBife , 
After entering your numbers in my spreadsheet, it looks like a negative cash flow to me indeed. Thanks for the reality check.

"No one makes money from renting a Studio or T1 -" 

In your opinion, what would be a good income property investment in Portugal with a positive cash flow?

Investing in a 2 or 3 bedrooms would cost more money, but I could charge more per night 
although the occupancy rate would probably stay the same and the cost of expenses would go up . 

or find a location where the occupancy rate is much higher like Lisbon or Porto?

thanks for your help.
J


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## MrBife (Jul 26, 2009)

judyw. said:


> or find a location where the occupancy rate is much higher like Lisbon or Porto?
> 
> J


You got it - Historic centre of Lisbon or Porto for higher tourist occupancy via AirBNB or student accommodation especially if you can keep the purchase price low by doing a conversion or refurb


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## judyw. (Feb 10, 2017)

i appreciate your precious help. I will look into bigger cities.
have a nice day!
J


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