Portugal’s commercial real estate landscape is undergoing a structural shift. Amid inflationary pressures, rising interest rates, and evolving urban demand, income houses – also known as multifamily or build-to-rent (BTR) properties – are emerging as one of the most stable and scalable asset classes. These residential investments now represent a growing share of commercial portfolios, supported by long-term rental demand, regulatory incentives, and demographic resilience.

For investors seeking yield, diversification, and long-term capital preservation, income-generating residential real estate in Portugal presents a compelling opportunity. At Roca Estate, we specialize in sourcing, structuring, and managing these assets for institutional and private investors across the country.

Why Income Houses Are Gaining Investor Attention

Multifamily assets accounted for approximately 24% of Portugal’s €2.5 billion total real estate investment volume in 2024. Unlike retail or office sectors – which continue to face pricing adjustments and usage redefinition – income houses offer investors a more predictable revenue stream, lower vacancy risk, and long-term relevance in a housing-constrained market.

Income houses fall under the commercial real estate category when owned for investment purposes and are evaluated using professional metrics such as net operating income (NOI), gross rental yield, and occupancy rate.

Key Drivers of Growth in the Income Houses Segment

1. Sustained Rental Demand
2. Rental demand continues to rise in Portugal’s main and secondary urban areas, driven by:
3. Urban population growth (Lisbon, Porto, Braga, Setúbal)

Lifestyle migration and visa programs (e.g., D7, Digital Nomad Visa)

Government restrictions on short-term rentals in core zones

Structural housing undersupply in affordable and mid-range segments

Median rents increased 9.3% nationally in Q4 2024, with Porto, Faro, and Coimbra seeing YoY growth exceeding 10%. These fundamentals support robust rental yields and long-term occupancy stability.

2. Attractive Rental Yields Across Markets

Gross rental yields on multifamily properties remain above EU averages:

City

Gross Yield (%)

YoY Rent Growth (2024)

Porto

5.5% – 7.0%

10.6%

Braga

6.5% – 7.5%

8.9%

Setúbal

6.0% – 7.0%

7.3%

Lisbon

5.0% – 6.5%

9.2%

These returns are especially attractive when compared to fixed-income instruments in a high-interest rate environment.

3. Government Support for Long-Term Leasing

Portugal has introduced a range of policies aimed at increasing long-term rental supply:

Mais Habitação (€2.22B): Subsidies and tax incentives for affordable rentals and urban rehabilitation

Reduced VAT on Renovations in Urban Rehabilitation Areas (ARUs)

IMI Tax Discounts for long-lease multifamily properties in cities like Braga and Setúbal

These policies improve investment viability and reduce operational costs for institutional landlords.

Where to Invest: High-Potential Regions for Income Houses

Selecting the right city is critical to optimizing yields and managing risk. Based on current data, the following locations stand out:

Lisbon

Highest rents (€16.04/m²)

Lower yields (5.0%–6.5%) due to elevated acquisition costs

Preferred by capital preservation-focused investors

Porto

Strong rental growth and infrastructure investments

Higher yield potential (5.5%–7.0%)

Popular with mid- to long-term multifamily investors

Braga & Setúbal

Higher gross yields (6.5%–7.5%)

Active municipal support for affordable housing

Ideal for value-add or yield-driven strategies

Faro & Coimbra

Double-digit rental growth (14.3% in Faro)

Attract digital nomads and students

Strong fundamentals for institutional-grade BTR assets

Key Considerations Before Investing

Multifamily investments in Portugal are operationally intensive and require localized expertise. Key issues to evaluate include:

• Asset Licensing: Properties must be registered for long-term rental, not short-term tourism (AL).
• Management Requirements: Leasing, maintenance, and tenant relations demand a capable on-the-ground team.
• Regulatory Compliance: Lease contracts, eviction processes, and tax obligations must meet national standards.
• Tax Optimization: Portugal offers multiple investment structures – SPVs, funds, and corporate entities – to align with international tax treaties and local exemptions.

Partnering with a qualified investment advisor is essential for navigating these factors. Roca Estate provides full-cycle support, from acquisition and due diligence to property management and yield optimization.

A Long-Term Strategy in a Changing Market

Income houses are no longer a niche – they are a core component of Portugal’s institutional real estate market. As regulatory policy shifts toward long-term leasing and housing affordability, multifamily properties are uniquely positioned to deliver risk-adjusted returns across market cycles.

At Roca Estate, we help investors secure off-market assets, structure compliant investments, and manage portfolios for sustained yield performance. Whether you’re deploying institutional capital or seeking a high-performing income property, our team provides tailored expertise and market insight.

Explore active opportunities in Portugal’s income house sector. Contact Roca Estate to begin your investment strategy.