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03, mar 23 | Reading: 11 min.

Buy or rent a house in 2023? | Casas do Barlavento

Buying or renting a house in 2023 is the question that may be on the table over the year. With inflation on the rise, the Euribor rate skyrocketing and interest rates following the trend, this question often comes up for those who plan to move out of their parent's home or who intend to expand their family and consequently need a bigger space. In this article, we will try to help you figure out which option is best for you.


Article cover image: Buy or rent a house in 2023. The image depicts office furniture in light tones, with a board with the question "Buy or rent a house?" standing out.

Photo by Hutomo Abrianto – Unsplash


Your family history, occupation and current financial situation can have a big impact on whether you buy or rent a house in 2023. In addition to these aspects, there are others you should consider before buying a house, which we will discuss in this article. Considering that this is a big step in your life is the first step, and organising and understanding which decision is right for you is the second step. Regardless of what you decide, this decision will affect your life.


Is it safe to invest in real estate in 2023?


Investments in any sector are classified as either low-risk or high-risk. Real estate is considered a safe investment because your money is invested in a physical asset rather than something intangible, such as stock market investments. Real estate is necessary for a decent life, so we can always take advantage of it. It can be our primary residence, our second home (holiday home), or it can be converted into long-term rental housing or local accommodation. The properties we invest in can also be used as service premises, shops, or warehouses, depending on the purpose of the property. So, if we can give so many directions to a property we invest in, we can inevitably take the best direction, depending on the moment we live in, without losing money.


The real estate sector will always have a minor impact compared to other sectors, even in times of crisis. In the case of Covid-19, the collective lockdowns created financial instability in many sectors and put them at risk. The real estate sector was not spared and experienced some changes, albeit temporary. Shortly after the first lockdown, property visits were carried out practically from Portugal to all parts of the world with the help of new technologies. So, it is well known that the real estate sector grew in times of pandemic, in terms of the technological means used. What also grew was the demand for the possibility of communicating with other countries in real-time.


Currently, we are witnessing the war against Ukraine, which is triggering the crisis in Europe, as well as some changes in the prices of construction materials and the escalation of interest rates. The 2022 was supposed to be a year of growth after the pandemic, but this did not happen. The results of these conflicting times cannot yet be estimated, but remember that real estate investments have several chances to succeed.


When you invest in a property, you don't necessarily have to live in it. You can choose sell or rent the property to make a financial return. Below we present the modalities that guarantee a return, i.e., selling, renting and real estate funds, and explain some aspects of each of these options:


  • If you want to sell a house, you should look for one with a good price, do the necessary renovations, and then put it back on the market. In this approach, you can seek advice from a real estate agent who knows the house area well and what the market demands in terms of changes. You can count on the Casas do Barlavento team to sell your property quickly. We have several clients waiting to find their dream homes.


  • Buying a property to rent out is one of the most popular types of property investment. It offers monthly income or seasonal income if you choose long-term or holiday rentals. You can choose between long-term rentals and local accommodation (learn all about investing in houses for rent in Portugal). Local accommodation requires an excellent location close to various amenities. In other words: If you invest in a property in a coastal town, the closer to the beach, the more bookings, and financial returns you will get. The same applies to rural accommodation: the quieter the surroundings, the more guests will want to enjoy your accommodation.


  • The real estate investment fund is another option, but it requires some patience and knowledge, as the gains are not immediate. One of the advantages of this type of investment is that you do not have to deal with tenants, the bureaucracy associated with buying and selling property, taxes or maintenance costs associated with traditional real estate (learn more about these and other real estate investment applications).


After determining that real estate investing is a great way to invest and grow your money, you should gather as much information as possible from experts in the field, to be prepared for the next step. Casas do Barlavento has been in the real estate business for 20 years, working in one of the most promising regions of Portugal, the Algarve. We are happy to assist you with your investment in the Western Algarve based on our experience and knowledge of the area.


Article image: Buy or rent a house in 2023. Several colourful buildings are lined up in the image.

Photo by Toa Heftiba – Unsplash



Are you still unsure whether to buy or rent a house in 2023? The answer always depends on your long-term goals and on your current financial situation. Make a list for each option: buying or renting a house. Enter the advantages and disadvantages in each list and insert our suggestions in the fields that make sense for you.


Buying a house in 2023 - Advantages


  • Increase in wealth

Buying property is one of the most common ways to increase wealth. A house can initially be a passive investment but quickly becomes an active investment when you put it on the market for sale or temporary or long-term rental.


  • Long-term investment

A property is something long-term and can stay in the family for many years. Villas or apartments purchased today can be passed down to future generations. By selling, renting, or occupying the property, your heirs will have a source of income, and even if they decide to live in the property, they will not have to pay rent or monthly mortgage payments. The increase in value of the property through renovation and constant maintenance makes it appreciate even more on the market.


  • A house you like

When you buy a house, you can remodel it whenever you want and make whatever changes you want. This is a significant advantage over rented housing because you do not need the landlord's permission to move in.


  • Control over expenditure

If you need a mortgage to buy your home, you know that interest rates are high these days and that there are stricter lending rules. You should be aware of this fact and always check the bank's monthly maximums when choosing your home and see if you can pay these amounts. Even in the current economic climate, it is possible to find a home with an affordable monthly mortgage payment. Rental costs are an unknown factor because the landlord may increase the rent in the next contract. In the worst case, the contract is not renewed, so the search for a property with the same characteristics and value continues.


Article image: Buy or rent a house in 2023. The image depicts a room with floor-to-ceiling windows, an orange armchair in the corner, and a bed, all of which have been decorated to the owner's liking.

Photo by R Architecture – Unsplash


Buying a house in 2023 - Disadvantages


  • Costs when buying a house

We know there are inevitable costs when buying a house, especially at the beginning of the process. When you apply to the bank for a mortgage, you will have to make an instalment payment and guarantee a deposit of at least 10% of the property value. In addition to these values, you must consider other initial values, such as:


- The process opening in your bank (the value depends on each bank unit);


- IMT - council tax on onerous transfers of property - is calculated according to the value of the property and the rate applied to it. You should know if you are exempt from paying this tax;


- Stamp duty, which is 0.8% on the house value, and if you take out a mortgage, you still must pay 0.6% on the value of the bank loan;


- Notary and registration fees are also part of these costs.


There are other costs, such as life insurance, fire or multi-peril insurance, condominium, and IMI (if you do not have a gross annual income of 153,300 euros, you are exempt from this tax for the first three years after buying the property). Although maintenance costs do not occur regularly, they should be considered.

This is not necessarily a disadvantage, but it is a fact, and you should always consider these costs in addition to the property's value.


  • Devaluation of real estate

Devaluation of real estate occurs when a property loses value. This happens due to the deterioration of the property or due to other factors such as an oversupply in the same area, poor maintenance of the infrastructure around the house, lack of documentation when selling and a real estate bubble. These risks can occur, but fortunately, they are not that common.


Article image: Buy or rent a house in 2023. On the wooden floor, we see a mobile phone, a wallet with cash, and a key.

Photo by Towfiqu Barbhuiya – Unsplash



Renting a house in 2023 - Advantages


  • Geographical mobility

Renting a house becomes very advantageous for those who like or need to move cities or countries all the time. Post-pandemic, the reality of jobs stagnating in one place has changed, and many companies have now adopted telecommuting models. Nevertheless, some deadlines need to be respected for long-term leases.


  • Free from costs

The costs of the condominium, IMI payments, and even property maintenance are the landlord's responsibility, not the tenants. A contract must specify how payment is to be made in the event of tenant irregularities, either directly or by deduction from the deposit originally requested when moving into the rental property. We can also say that renting a house does not require a mortgage, so you will not be in debt to the bank.



Renting a house in 2023 - Disadvantages


  • Endless rent payments

Rent is paid monthly and indefinitely for as long as the landlord wants to renew the lease or the tenant wants to stay in the property. Rent does not guarantee home ownership, and you will always be paying for something that will never be yours.


  • High rents

Rents are getting higher and higher, with no slowdown in sight. Demand for long-term rental housing has increased, and so have rents. All regions of the country have suffered from these changes. The districts where this is most noticeable are Oporto, Lisbon, and the Algarve.


  • Permission to carry out repairs

The rented house may not be altered without the landlord's permission. If the landlord permits the work to be carried out, the costs may be borne by the tenant without the tenant being entitled to a refund. This is only the case if, for example, the tenant wants to add an extra room for a new family member. Maintenance and upkeep work is always at the expense of the landlord.


  • The end of the lease contract

When a real estate lease expires, the tenant has two options: see the renew of the lease for at least one year or not renew the lease at all. The demand for rental housing is enormous, and the supply is scarce. Although the non-renewal of the contract is communicated to the tenant in good time, the experience of not renewing the contract causes some anxiety, even more so when the tenant knows that he has only a few months to find another place to live.


 Article image: Buy or rent a house in 2023. In the image, there is a person signing a contract on a wooden table.

Photo by Adeolu Eletu – Unsplash



Buying or renting a house in 2023 is the most common question, especially for young people who are now thinking of leaving their parents' homes. We always advise you to review your current financial situation, plan your future goals and consider the costs of renting and buying a house.


If you decide to buy a home, Casas do Barlavento will assist you every step of the way. We understand that this is an important decision in anyone's life, which must be accompanied by the highest level of professionalism and knowledge of the real estate industry. Please contact us!