Investing in rental properties in Matosinhos Sul, a coastal area in the metropolitan area of Porto, can be an interesting option for several reasons, although it is also important to take into account some risk factors and the dynamics of the real estate market in the region. Below, I detail some pros and cons of investing in this area:
Advantages of investing in Matosinhos Sul
Tourism growth and proximity to Porto: Matosinhos Sul is located very close to Porto, one of the most important and touristic cities in Portugal. Its proximity to the city and its good transport connections make Matosinhos an attractive place for tourists and people who prefer to live outside the urban hustle and bustle but close to the center. Matosinhos beach is an important tourist attraction, which favors short-term (holiday) rentals during high seasons.
Growing rental demand: Rental demand in the area has grown for both long-term and short-term rentals (tourism). Matosinhos has an attractive lifestyle, with good infrastructure, green spaces, beach and a higher quality of life compared to central Porto. Expats, young professionals and students are also looking for alternatives outside the urban core of Porto, increasing the demand for long-term rentals.
Relatively lower prices than Porto: Although prices in Matosinhos Sul have risen in recent years, they are still generally more affordable compared to central areas of Porto. This can provide a better return on investment (ROI), especially if the market continues to grow.
Good connections and services: Matosinhos Sul is well connected to the Porto metro and has quick access to other infrastructure such as hospitals, schools, shopping centres and restaurants. This attracts both families and young professionals.
Stability in the real estate market: The real estate market in Portugal has shown reasonable stability, with steady growth in coastal and tourist areas. Matosinhos Sul could benefit from this trend in the medium and long term.
Disadvantages and risks to consider
Competition and market saturation: Although demand has grown, the supply of rental housing has also increased, both in Matosinhos and Porto. In the vacation rental segment, you could encounter strong competition, which could affect profitability if not managed properly.
Regulation of short-term rental (AL): In Portugal, short-term rental (known as Alojamento Local, AL) is subject to regulation. Some areas are limiting the granting of new licenses for tourist accommodation, due to concerns about gentrification and rising costs of living. Be sure to check local policies before buying with the intention of renting short-term.
Price appreciation: Although property prices in Matosinhos are relatively lower than in Porto, they have risen significantly in recent years, which could limit the ability to find investment opportunities at attractive prices. If you buy when prices are high, profitability could be affected if prices stabilise or fall in the future.
Low season: In the case of holiday rentals, you should bear in mind that Matosinhos is very attractive in summer due to its proximity to the beach, but in winter demand can drop significantly. This could affect occupancy and profitability if you rely on holiday rentals.
Additional costs: Maintenance costs, taxes (such as IMI, Stamp Duty and IMT) and rental management fees can affect profitability. It is important to do a detailed analysis of the costs before making the investment.
Conclusion
Investing in Matosinhos Sul can be a good option to diversify your real estate investments, taking advantage of the proximity to Porto and the tourist demand. However, it is essential to take into account market dynamics, competition and local regulations, especially if you plan to rent on a short-term basis. To maximise your return on investment, it is advisable to conduct a thorough market analysis and consider both fixed costs and possible fluctuations in demand.
If you have a long-term vision and plan to rent to tourists or residents, Matosinhos Sul offers an attractive location with good growth prospects.