Underwrite it before you fall in love with it.

There is no single number, and anyone offering one is selling something. Prime city and resort assets generally produce low gross yields — often in the 3% to 5% range — with the return weighted toward capital growth, which is the least predictable component. Secondary cities and short-let strategies can produce more income at the cost of higher operating expense, seasonality and regulatory exposure. The model asks you for your own assumptions rather than supplying flattering ones.

Gross yield is annual rent over price. Net yield deducts operating costs and, in this model, measures against total capital deployed rather than the headline price — which is the more honest denominator once transfer tax and fees are counted. IRR goes further again: it annualizes the return across the entire hold, accounting for the timing of every cash flow, the financing and the eventual sale. It is the truest single measure, and also the easiest to inflate with an optimistic exit assumption.

Because the gap between them is the contribution of the debt, and it is worth seeing separately. Leverage amplifies the return when the asset outperforms the borrowing cost and amplifies the loss when it does not. Unlevered IRR tells you whether the asset itself is any good. Levered IRR tells you what the financing did to it.

Before tax unless you switch the after-tax view on, and then only at rates you enter yourself. The applicable rate depends on residence, on whether the owner is an individual or a company, on the type of lease and on the treaty position — none of which a calculator can determine. What the model does hold firm is that financing costs are not deductible against Portuguese rental income, so the tax base is computed before debt service even though your cash flow is not.

Yes, along with the exception. A flat 7.5% applies to non-resident acquisitions of residential property under the 2026 rules, but a buyer who has previously been a Portuguese tax resident is understood to fall outside it and to be assessed under the general tables instead. Both positions are available in the model because the difference in entry cost changes the return. Above roughly €1.15M the general tables already charge 7.5% on the whole value, so at the top of the market the two produce the same figure.

For a long-term residential let in a liquid market, single-digit vacancy and operating costs in the region of one fifth to one quarter of collected rent are a reasonable starting point once management, maintenance, insurance, municipal tax and condominium charges are counted. Short-let strategies carry materially higher costs and far greater seasonality. The break-even occupancy figure in the results is there to show how much room the assumption actually has.

Because prime yields are low and amortizing debt is expensive. On a well-located asset at a 3.5% gross yield with sixty percent leverage, the debt service frequently exceeds net operating income in the early years. That is not automatically a bad investment — it is a capital growth investment with a carrying cost, and it should be recognized as such rather than discovered in year two. If the carry cannot be funded from elsewhere, the leverage is wrong for the asset.

It is total cash returned divided by equity invested — a 1.8x multiple means the capital came back with eighty percent on top of it. IRR gives the rate, the multiple gives the scale. A very short hold can produce a flattering IRR on a trivial sum of money, and the multiple is what exposes that.

Yes — sourcing including off-market, underwriting, negotiation, structuring with legal and tax partners, and the eventual exit. This model is a starting point for a conversation, not a substitute for diligence on a specific asset. Where the numbers on a particular opportunity do not hold up, we say so.