Differences in Style: Renting in Portugal vs. the US

An unexpected place where you’ll find some fairly significant cultural differences between the US and Portugal is in the rental of apartments.

Portugal doesn’t have the same mindset about property ownership that you find in the US. The idea of owning your own home has been sold as part of the American Dream and encouraged with tax advantages (although not as much as it used to be). Paying rent is seen as throwing money away.

That’s not necessarily the case in Portugal, especially in the cities. Renting is common and has no social stigma attached to it.

Buying is also expensive here. Down-payments are high and there are multiple taxes associated with purchasing and owning property that renters don’t have to worry about. On average, if you’re going to stay in the same place more than 18 years, it will probably be cheaper to buy, but the chance of us doing that is effectively nil.

Another factor is that although mortgage interest rates are very low, no bank will write a contract that lasts longer than until the purchasers turn 75. In our case, that makes monthly payments pretty high! We could afford it, but we’d be house-poor enough that it would seriously impact our desire to travel.

So, we rent and probably will continue to do so.

Finding an apartment to rent can be a real adventure. Most owners list with a realtor, and some of the big companies like RE/MAX and Century 21 have a presence here.

Apartments are typically advertised on a few major websites (Idealista, Immovirtual, Caso Sapo, etc.) and on the agency’s site. However, they may not be on all sites – and they may appear multiple times on the same site with slightly different descriptions, so it’s not always easy to find what you’re looking for. There are also some owners who don’t advertise, but you will only find out about them via word of mouth – these places typically go to friends or family members.

The ads are often not very complete, and sometimes are downright inaccurate. We were looking for an unfurnished apartment in specific neighborhoods and kept seeing ads come up which turned out to be “semi-furnished” (i.e., really furnished) or in locations that were outside our criteria.

Also, there were a lot of ads online for places that had already been rented – the equivalent of leaving the “For Sale” sign up as a way to generate leads. “Oh, that property is rented, but what are you looking for? I can help you!” plus a lot of loss-leaders.

Biggest shocker is that there is no “MLS” system here – no central repository for all properties. Realtors don’t even know for sure what properties other people in their office have available. Overall, this makes the search process pretty time-consuming and labor intensive.

Also, there’s no guarantee your realtor will be able to help with certain properties. Agents are paid a commission by the landlord based on the rental price. In the US, there’s a fairly standard reciprocal agreement about how that commission is split between selling and buying agents. In Portugal, this is not a given – some landlord agents will not split commissions, which means the prospective renter needs to contact them directly.

During this search, we were forwarding ads to our agent in Lisboa. He was following up to verify facts and get addresses where possible and set up video tours. Where the listing agent wouldn’t work with him, or where they didn’t even answer his inquiries, we tried to contact them directly to set tours up.

The video tours helped to rule out a number of possible properties. If places looked good, or if video tours weren’t possible, we set up in person visits during a couple of short Lisboa trips.

Viewing apartments is logistically challenging, especially during COVID, since all agents need to be present – they do not have lockboxes here! Keys to apartments aren’t even always available to agents from the same office.

All in all, we physically visited eight properties and took video tours of a half dozen. There were some others we would have liked to see, but at the end of the day we had three that would work with one clear favorite.

Next up – making a proposal.