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 of Casa no Minuto or the credit intermediaries of Poupança no Minuto, for free. If your questions are related to the above, we will explain them shortly.
What does it mean to rent a house?
Renting refers to a type of lease contract regarding an immovable thing, such as an apartment or a store, as can be read in a Notícias ao Minuto publication.
"When the contract involves an immovable thing, it is called lease, which is the contract by which one party (the landlord) undertakes to provide the other (tenant or lessee) with the temporary enjoyment of an immovable thing, in exchange for a pecuniary consideration, usually periodic (rent)," explains the information platform.
What is the difference between leasing and renting?
But many confuse the term lease with rent. Both are legal concepts, but unlike leasing which applies to real estate, rent refers to movable articles.
It is possible to rent items temporarily like a car or various equipment, but not a property. Notícias ao Minuto explains, renting "is a contract by which one party undertakes to provide the other with the temporary enjoyment of a movable thing, against payment."
How much does it yield to buy a house to rent?
Renting a house usually has the purpose of housing. But it can also be an investment business, as many people see it. Does buying a house and renting it out compensate for the costs of acquisition and taxes?
The numbers don't lie and show that yes: According to a News in a Minute publication, "buying a house and renting it out yielded 7.5% in the third quarter, with profitability increasing over 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 that calculated for the same period in 2022 (5.9%)".
What does it mean that housing profitability was 1.6 p.p. 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 the most sense to buy a house for rental investment? The data indicates Santarém.
"Analyzing by district capitals, buying a house for investment is most profitable in Santarém, with a return rate of 7.9%." According to data indicated by Notícias ao Minuto, 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%.
Buy a house to rent? Get help from a credit intermediary.
Are you considering moving forward with one of these strategies and investing in the real estate market? According to the data, it may be a good time for this investment. And you can do so, even by buying property to rent out through a mortgage loan.
Consult a credit intermediary to clarify all your possible doubts, and have access to free and personalized support throughout the home buying process with financing.
The intermediaries 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!