Lisbon & Algarve Investment Hotspot: Converting Vacant Buildings into Tourist Goldmines
A key trend is offering savvy foreign investors a new entry point into Portugal's profitable property market: converting old buildings into high-yield tourist apartments. German firm Limehome is leading this charge, having already launched 350 units in Lisbon and Porto, and is now expanding into the Algarve (Faro, Lagos) and other key cities. This model provides a clear path to turning underperforming assets into stable, long-term revenue streams.
What Foreign Investors Need to KnowLimehome's model is a partnership. Investors and developers handle the acquisition and renovation of a property (like an old office building or a dated hotel), while Limehome provides the design, planning, and operational management. The financial advantage is significant: by minimizing common areas like lobbies and restaurants, these properties dedicate 65-70% of their space to revenue-generating rooms, far exceeding the 50% average of traditional hotels. "This efficient use of space directly increases profitability for property owners," says Limehome's CGO, Daniel Hermann.
Actionable Steps for Today's Buyer- Identify Conversion Opportunities: Search for vacant or under-utilized commercial properties in central Lisbon, Porto, or the Algarve. Buildings that are structurally sound but aesthetically dated are prime candidates.
- Analyze Zoning Regulations: Before purchasing, ensure local zoning laws permit the conversion of the property to tourist accommodation ('Alojamento Local' or tourist apartments).
- Partner with Experts: Collaborate with firms like Limehome or local project managers who specialize in this type of conversion to streamline the design, renovation, and licensing process.
- Calculate a New ROI: Your return on investment will be based on nightly rates and high occupancy, not just long-term rental income. This model can offer significantly higher yields if managed correctly.
Explore opportunities with realestate-lisbon.com.
