Category: Real Estate Investments (6)

The sale price of houses in mainland Portugal increased by 15.6% in September, according to the Confidencial Imobiliário Residential Price Index.

In monthly terms, the rise was 1.3%, according to the publication that tracks the change in transaction prices in the residential market. The September figures confirm that prices in the housing market continue to accelerate, with year-on-year increases having risen by more than 10% every month since July 2017.

“This year, valuations were always higher than 13.5%, reaching a maximum of 16.4% in May and remaining at around 15% since then,” the report said.
The cycle of housing price recovery began five years ago in the last quarter of 2013, but for about two years, year-on-year increases remained below 3%.

Only in 2016 did the recovery began to accelerate, with prices rising by 3.5% to 9% by the middle of last year and significantly increasing the pace of growth since then, with year-on-year variations always in double-digits. This cycle of successive increases has led to prices being 10.6% above the pre-crisis period (2007) and having recovered 41.4% from their lowest level (seen in June 2013).

Confidencial Imobiliário is a company specialized in the production and dissemination of market analysis indicators, with indices and databases on demand and sales in the residential market, detailing each parish.

Source: Confidencial Imobiliário, The Portugal News

House prices in the Euro Area and the European Union increased 4.2 and 4.5%, respectively, in the last quarter of 2017. Portugal had the second largest annual increase (10.5%) of the Euro Area.

Conde Valbom 76 - Living Room by Silver Keys Properties

House prices in the Euro Area increased 4.2% in the last quarter of 2017, according to data published this Wednesday by Eurostat. As for the European Union, the increase was greater: it ascended to 4.5%. Portugal was the second Member State of the Euro Area with the largest annual increase, with prices rising by 10.5%, only behind Ireland, which had 11.8% increases.

These amounts were determined using the House Price Index, which revealed a 4.2% increase in the Euro Area and 4.5% in the European Union in the last quarter of last year, in comparison to the homologous period. In comparison to the previous quarter, prices increased 0.9% in the Euro Area and 0.7% in the European Union.

Annual rate of change for the Euro Area and the EU house prices

Source: Eurostat

As for the annual evolution of each Member State, Ireland registered the largest increase in the Euro Area in 2017, with prices growing 11.8%. Behind Ireland stands Portugal, the second largest increase, with housing values growing 10.5%. In Italy, house prices had the largest fall of the year (0.3%).

In comparison to the previous quarter, the largest increases were registered in Slovenia (3.7%), in Croatia (3.2%) and Cyprus (2.7%). On the other hand, the largest decreases in prices took place in Sweden (2.8%), in Denmark (1.7%), Belgium (0.4%) and Finland (0.3%). In Portugal, the indicator grew 1.2% from the third to the fourth quarter of 2017.

The beginning of this decade was a harsh time for Portugal with its Rate of Real GDP Growth plumbing down almost 6 points between 2010 and 2012.

After fourteen years of a very optimistic economic growth (between 1986 and 2000) much due to the Portuguese entry in the European Union, the Portuguese economy suffered an almost stagnation in the passage of the millennium.

In order to understand the phenomenal growth of the Portuguese economy in the decades of 80 and 90, it´s important to note that the Portuguese dictatorship only ended in 1974 followed by a troublesome year of 75 when the communist “red threat” almost took over the country.

Time Magazine cover for 11 of August of 1975, depicting the communist threat after the fascist dictatorship

The 80’s and 90’s were dedicated to rebuilding the country. It was necessary to improve the education and health facilities debilitated by the long fascist dictatorship. The number of public workers rose especially in the 90´s reaching a maximum 14% of the public expenditure, 4% more than in the previous decade. The country’s entry in the European Union in 1986 was also a key factor for this economic growth. In the 90’s the big increase in credit (1000% in consuming credit and 733% in housing credit) reflected the national and international confidence in the Portuguese economy. This was the quiet before the storm, however, or at least the quiet before stagnation.

In 75 the provisional government (also known as Revolutionary Process in Course) headed by Vasco Gonçalves nationalized the major banks and Portuguese companies. This was the major impact of the year-long “Portuguese red threat”. The nationalization process consisted of creating an agglomerate of several private companies (putting seven cement companies together creating a major cement company, for example), and then nationalizing this new, big company. Even though the following governments reverted this process, they did not dismantle these big companies into their original parts. The following governments did privatize the companies seized by the RPC in 75, but they privatized the big conglomerates created by the RPC, creating an oligopoly effect. This aligned with the limitations for foreign investments, led to the stagnation of a blooming, but still developing economy (70% of the EU average) at the beginning of the XXI century.

Buying real estate is about more than just finding a place to call home. Investing in real estate has become increasingly popular over the last 50 years and has become a common investment vehicle.

If you are an investment newbie, you probably have a lot of questions in mind. What is real estate investment? Why should I invest my time in it? Is it worth investing my time? Where do I look? When do I start? How do I proceed?

To help clarify things, here is our guide for real estate investment newbies.


The “What”

What is real estate investment?

In the past week, I went around asking this question to some of my friends both in and out of the real estate field, and the responses I got were quite interesting.

“Oh you mean flipping a home?”

“I think it’s like buying a house and selling it for profit?”

“Buying a house…?”

Buying a property and renting it out?”

The most surprising thing I found was that no one was sure what real estate investment really means. They all sounded hesitant with their responses.

But the good news is that everyone was on the right track. Real estate investment involves investing in a real property for the purpose of making money.  There are numerous ways to do this, some simple and some very complicated, so to simplify this for a newbie, I’ll just speak on the most commons methods to invest in real estate.  Most people purchase property to either, 1) buy and hold to generate rental income, or 2) buy and flip or to sell to someone else when the market price goes up.  But let’s be honest here, there is nothing wrong with doing both.


The “Why”

Why should I invest my time in it? Is it worth investing my time?

Passive income

As you may have guessed, the keyword here is passive income. Imagine earning supplementary income in your sleep – sounds too good to be true? It’s not. With the right properties and having other people manage the property for you, it is very possible for you to make money while you plan your upcoming vacation in Hawaii.  But is the income really passive? Yes and no.  Yes, if your property manager will treat your property like it’s their own, which is unlikely.   Therefore, in the real world, most people will need to spend a little bit of time to manage the managers, and to keep track of what they are doing and if it is inline with your expectations.

Leveraging other people’s money

Yes, you read it correctly. Unlike daily commodities, you don’t need to pay the 100% cash for real estate.  As this is a hard asset that the banks can take back in-case of defaulting on payments, they will lend you up to 80% of the purchase price in the form of a mortgage. If the investor chooses to use their home equity line of credit (HELOC) to finance the down payment and all starting costs, you can effectively leverage 100% of your property using the bank’s money.  How cool is that!

Predictable Returns

When you do the math before you purchase, you will already know your estimated monthly expenses and income. As the years pass, it is likely that your property’s value is now worth more than when you purchased it. Essentially, this means that as your mortgage balance is going down, your home value is going up. Everything in between is the equity on the property that your tenants helped you get.  What a beauty.


The “Where”

Where do I look?

Real estate investment will most likely be one of the most significant investments of your life, so it’s obvious that you want to put a lot of thought into it and make an educated decision on the location. Areas where there are job growth, population growth, and low vacancy rates is what we would recommend.


The “When”

When do I start?

Assuming you have the money to invest, my honest answer to you is as soon as possible. Having said that, when do you know you’re ready?

Consider asking yourself these questions:

  • Is your source of income secure enough for you to be making an investment?
  • What are your priorities in life? Would real estate investment help you fulfill your goals?
  • Are you able to set aside some time to connect yourself with resources that will help you get your first property? E.g. time to do research, time to meet with mortgage brokers and realtors who could help you with your investment, etc.


The “How”

How do I proceed?

Find a realtor who is also an investor him/herself. They will already know the best places and properties to invest in, thereby fast-tracking your learning.  You also get the opportunity to leverage the knowledge and experience from the real estate investor’s team.

In addition, the team will be able to guide you through a wide range of considerations from conducting a cash flow analysis to supporting you through your concerns about the process of investing (and they could definitely relate because they’ve been in your shoes before).

You think you’re ready? Unsure? That’s okay! It’s never too early or too late to start investing in real estate.  Contact Silver Keys Properties Team today by emailing us at info@silverkeysproperties to learn more about real estate investment and get advice from experienced professionals.

What are the benefits of hiring a Property Management Company?

Thinking about the real advantage of hiring a property management company can be different from the different perspective. This article will focus on some of the best benefits of hiring a property management firm.
If you’ve owned income property for any length of time, you know that managing a rental can be financially rewarding. At the same time, you’ve also likely discovered that property management requires a large commitment of time and effort.
Do you think you are making the maximum profit from your property?

Are you satisfy with dealing the customers?
If the answer is no, then it’s the time to hire some professionals.
So, what will a property management company offer you?
Let’s go into the details and find out what are the benefits of hiring a property management company.

1. Quantity and Quality of customers:

Okay, first thing first we all want maximum output from everything we own. So, if you think your property can be a good income source for you then why not give it a try.
So here it is what a property management company can do for you.

Quantity:property management lisbon

Your property sometime can’t be booked through the channel you are using and that time you are losing money.
You want your property to be booked all the time but because of lack of networking and knowledge, you somehow are losing money.
So here I think it’s better to hire the property management firm because those firms have networking and plenty of platforms. They will ensure that your property gets customers constantly.

Quality:Property management benefits

A big part of what any property management firm does is deal with tenants on a day-to-day basis. Responsibilities include advertising open units, interviewing and screening prospective tenants, drawing up leases, handling move-ins and move-outs, dealing with complaints, collecting rent, handling late payments and, in the worst scenarios, managing evictions.
By allowing a property management company to handle the screening, you will also be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process. This kind of experience takes time, and insomuch as it means avoiding bad tenants, scams, and lawsuits it is arguably one of the most significant benefits a property management company will provide.

2. Legal help and paperwork:

property management benefitsSometimes tenants can cause significant legal and financial headaches. A good property manager is armed with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential lawsuit. Each state and municipality have their own laws. So here is what a property management company can do:
 Channel Management
• Tenant screening
• Safety and property conditions of the property
• Evictions
• Inspections
• Lease addendums
• Terminating leases
• Handling security deposits
• Rent collection
These things are costly and time-consuming. So, avoiding a single lawsuit can more than pay for the property management fees, and spare you time and anguish.

3. Repairs and Maintenance:

Good maintenance and repairs keep tenants happy and preserve the value of your investment which makes them a very important part of land-lording. By hiring a property management firm you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors and real estate agents who have already been vetted for good pricing and quality work.
Apart from that decorating and designing your property can make you more profit. A property management company knows how to hack designing stuff to make it more valuable at less cost.

4. Personal benefits for owners

 Less stress – Avoid having to deal with middle of the night emergencies, chasing down rent, evicting people from your property, tenants who wreck your propertyrental scams, lousy vendors, piles of paperwork.
• More freedom – Live and invest wherever you want with the constraint of needing to be near your properties. Additionally, you can live and travel without the requirement of always being available if your tenants have a need you have to tend to. Once you have found a good property management company, it doesn’t matter if you live in the same state. Some landlords live in other countries and simply collect their check every month without ever seeing the property.
• Lots of free time –Managing property is a time-consuming work if you have this as a side income source then it’s better to give a chance to property management firm. Time is money, and for many investors, their time can be more profitably spent in areas other than servicing their properties. When you focus on asset management you’re working ON your business, when you manage your own properties you work IN it. Additionally, you have more time to spend with family or friends doing things you enjoy.

5. Rent on time and No Headaches:

Since many property management companies deduct their fees from the monthly rent, they are motivated to keep those payments flowing in. Consistent rent collection is the key to receiving rent payments on time, and a property management company will enforce lease policies if payments aren’t received. If tenants are consistently failing to pay their rent on time (or at all), the property manager will know the proper steps to deal with the situation, including issuing an eviction notice if necessary.

If someone else is handling the daily management of your rental property and tenants, you’ll have fewer complications and commitments to worry about. If more time and less stress are key to your quality of life, a property management company can be a great asset.
Investing in the rental real estate can contribute to your monthly cash flow and build long-term wealth — but day-to-management isn’t for everyone. If you just want a rent check and don’t want to be responsible for all of the details of your real estate investment, leaving it up to the pros can be well worth the cost.

Lisbon's Calçada do Sacramento

Moving to Lisbon

Begining Of Journey From Beautiful Islands ( Azores)

In my birthplace of Terceira Island in the Azores, an archipelago between the American and European continents belonging to Portugal, there’s a question that imposes itself to all high school students: “will I leave the Azores at the end of these three years to go to college in the continent?”
The bucolic, romantic hearts might have some difficulties understanding why someone would want to leave the breathtaking natural landscapes and the almighty Atlantic Ocean of the Azores. The bucolic, romantic hearts probably didn’t grow up in a pretty rock separated from the rest of the world by miles and miles of unruly water, crossing oneself with the same faces, tastes and ideas day in and day in. At least that was how I felt, not all Azoreans are introspective, melancholic potential cinema students, actually, most of them aren’t, and that was my problem.


Lisbon, A city of Dreams and Opportunity in Portugal.
My mind was set even before I went to high school: I’m going to run through these three years as fast as I can and move to Lisbon, not the continental part of Portugal, Lisbon, got to be Lisbon. All of Europe can fit into Lisbon to the eyes of a young Azorean man. Saying “over there in Lisbon” when you actually meant “over there in any continental part of Portugal” was such a common mistake in Terceira that eventually it wasn’t a mistake at all. We obviously knew that Lisbon wasn’t literally the rest of the world but deep in our hearts that’s how we felt; here we are in our recondite part of the world, with our ocean, green pastures and cows and everything else, civilization has the world knows it, was two hours by plane away, in Lisbon.

When I moved to the Lisbon.
The city corresponded to my expectations when I moved in; in it, I could see a sample of the world, I was as impressed by the social landscape in Lisbon as most people are by the natural landscapes in my homeland. A harmonious conglomerate of languages and styles converged into this city, following their invisible paths through rectilinear avenues or exploring the narrow streets of smaller neighborhoods. Anywhere I went someone I could never find in Terceira looked for something I never experienced before. I felt all the enthusiasm one feels when knowing his life is going to change dramatically but I also felt something else: I’m not home anymore.
This feeling hit me the strongest when I returned to Lisbon after my first Christmas vacations, three months after I moved in. I knew these streets well enough to not be as surprised by them as I was when I first moved in Lisbon, but not to the point of familiarity. And that was precisely what I needed in that time where Christmas has already ended but not really passed, familiarity.
Then it was 7 AM and I couldn’t sleep, I’ve spent the night searching all angles of my Lisbon bed looking for the one I left in Terceira and all I could find was more reasons to keep on searching. I got hungry, I had no food, I always had food in my parents’ house in Terceira, my house, in Terceira. I ended my bed expedition, got up, grabbed the money on the bedside table and went to the small bakery near my house that opened precisely at 7 AM.
The baker greeted me with a familiar smile, sold me a warm chocolate croissant and a loaf of bread, asked how my day was going and complained a bit about how early he needed to wake up in the morning. I’ve only been to that bakery two or three times before and yet I felt like it was the most routine part of my life. I stored the loaf at my house, ate my croissant with some milk, left the house and decided to roam around my neighborhood. The narrow streets embraced me, the old houses with its picturesque motives and Portuguese traditional tiles kept me warm on that January morning.
I sat down in a café/florist/gourmet store that I usually went to, asked for tea and opened a book with the intention of reading it. But then the waitress/florist/gourmet store owner asked me the reason for my recent absence. I told her I was in the Azores for Christmas, she asked questions about the archipelago and talked about her hometown in Alentejo until I finished my tea, a cigarette, a coffee and another cigarette.
When I walked back home I was seeing a side of Lisbon I haven’t thought I would see, much more need it. Yes, Lisbon is a cosmopolitan city, filled with visitors from all corners of the world, visitors that easily top the number of inhabitants in the central parts of the city, but it isn’t just that. It’s also an old town, with narrow streets, warm people and places you will easily recognize and go back to time and time again. Lisbon is a city that lots of non-natives chose to call home because it’s really easy to feel familiar in Lisbon.