5 common mistakes international investors make when entering the Portuguese market

Portugal has become a destination of choice for real estate investors from all over the world. With a mild climate, safety, a good quality of life and prices that are still competitive with other European capitals, our country has many advantages.

However, entering a new market means getting to know the rules, the business culture and the local peculiarities. Many international investors end up making mistakes that can jeopardize their goals - and they often make them due to a lack of information.

In this article, we've put together the five most common mistakes made by those investing in Portugal for the first time, and explain how to avoid them to ensure a safer and more profitable investment.

1. Not knowing the local legislation

Portugal has specific rules when it comes to buying, renting and managing real estate. Many investors ignore details such as the obligation to have a Tax Identification Number (NIF), the need for fiscal representation, the registration of contracts on the Finance portal, among others.

How to avoid:

Before investing, it is essential to have a team specializing in Portuguese legislation to guide every step and help avoid unpleasant surprises.

2. Focusing only on Lisbon and Porto

Although Lisbon and Porto are the most popular destinations, focusing exclusively on these cities leads many investors to miss out on opportunities in other regions with great upside potential - such as the Algarve, the Alentejo, the West or the Center of Portugal.

How to avoid this:

Evaluate your investment profile (short or long term, with a view to profitability or appreciation) and consider emerging regions with less competition and lower costs.

3. Neglecting additional costs

In addition to the value of the property, there are taxes and charges that many international investors don't account for, such as IMT (Municipal Tax on Onerous Transmissions), IS (Stamp Duty), notary costs, land registry and any rehabilitation works.

How to avoid:

Ask for a full simulation of all the costs associated with the purchase, including legal and tax expenses, to ensure more accurate financial planning.

4. Ignoring the importance of a local partner

Investors who try to manage everything remotely often end up falling into traps, delaying processes or missing out on good opportunities due to a lack of local support.

How to avoid this:

Choose a reliable company with knowledge of the market and a presence on the ground, which can represent your interests and act quickly.

5. Lack of long-term strategy

Investing without a structured plan - such as defining objectives, the type of property, the target audience and the expected return time - is a common mistake. The Portuguese market offers different possibilities, but each requires a different approach.

How to avoid it:

Create an investment plan in line with your objectives and the reality of the market, adapting to factors such as location, tenant profile and future trends.

The Portuguese real estate market is stable, transparent and full of opportunities - but to make the most of it, it's essential to avoid the most common mistakes made by international investors. Information, planning and a good local support network make all the difference.

At IR Group, we guide international investors to make safe, profitable and sustainable decisions. With experience, local knowledge and complete solutions, we are your strategic partner for investing in Portugal with confidence. Talk to us and find out how we can turn your project into reality.