10 Common Mistakes First-Time Real Estate Investors Make in Portugal
And the fixes that will help you avoid them
“Only a fool learns from his own mistakes. A wise man learns from the mistakes of others.”
— Otto von Bismarck
In the world of real estate investment in Portugal, every mistake can have a real impact — on your wallet and on your peace of mind. So I put together the 10 most common, meaningful mistakes Israeli investors make — and the fixes that will help you avoid them.
- 1
Not knowing how to properly compare properties
The mistake: Comparing properties by price per square meter. Portugal uses a different measurement method than what you may be used to — a listing often advertises a much larger area than the property actually has (sometimes including space that shouldn't count at all). Another common mistake is comparing the price per square meter of new properties against older ones.
The fix: Learn the Portuguese measurement method, or order a pre-valuation. You can also get a market value assessment.
- 2
Not understanding the tax system
The mistake: Not accounting for the income tax Israeli residents owe in Israel on rental income. And no, the tax treaty does not exempt you from paying it.
The fix: Check in advance and consult an accountant, and decide on the tax route that's right for you. Don't forget that depreciation deductions end up hurting your capital gains tax on sale!
- 3
Investing in a "cheap" deal in an area with no potential
The mistake: Investors get drawn in by low prices without checking real rental or resale demand in the area.
An investor recently came to me for a feasibility check. A developer had offered them a new apartment, to be built in 3 years, in an unattractive neighborhood to put it mildly, priced like the city center. There's simply no way to rent or resell it anywhere near the price they were quoted.
The fix: Do independent market research, use the tools available for market analysis, or get professional help — never buy without a feasibility check!
- 4
Not understanding the local financing process
The mistake: Applying for a mortgage without knowing the specific requirements of banks in Portugal. Even well-off clients have been turned down more than once.
The fix: Work with a local financial advisor who can guide you through the process and show you the required documents before you even start looking for a property. It's worth starting with our Mortgages in Portugal guide.
- 5
Signing the CPCV without fully understanding it
The mistake: Signing the contract before getting mortgage approval, checking on full vacancy of the property, and confirming every aspect of the contract. The deposit isn't refundable if you fail to meet the contract's terms!
The fix: Always hire a dedicated expert lawyer in Portugal, who'll review all legal documents, confirm there are no debts on the property and no tenant who can't be evicted, and protect you in the contract.
- 6
Ignoring the deal's total cost
The mistake: Focusing only on the purchase price, without accounting for extra costs like renovations, taxes, management, and notary fees.
The fix: Build a proper list of every expected cost and factor it into your return calculation. Our purchase cost calculator will help you see the full picture upfront.
- 7
No exit-strategy planning
The mistake: Buying a property without thinking about your exit strategy (sale or rental).
The fix: Make sure there's future demand in the area, and be prepared for long-term market forecasts.
- 8
Not understanding long-term rental law
The mistake: Buying a property for long-term rental without understanding the risks involved.
The fix: Learn the tax routes, how tenant eviction works, and the rules that apply to sick or elderly tenants. Always consult a lawyer.
- 9
Buying off-plan for an "on-paper flip"
The mistake: Buying an apartment still under construction with future delivery, assuming it'll be easy and quick to resell at delivery.
Another case that came my way: investors bought rights to an apartment in a future project at above-market price (because they didn't know the market), and paid a deposit. The project is set to be delivered together with roughly 200 other units at once — the odds of reselling at the price they expected are slim, and probably not even at the price they paid. It gets worse, because their income isn't enough to get a mortgage to actually buy the apartment — so they may lose the deposit, or sell at a loss.
The fix: Market research — always. Doubly so when buying a property in a foreign country.
- 10
Ignoring the local market conditions
The mistake: Investing without keeping up with local market trends and conditions.
The fix: Follow market data, property prices, and regional yields. Invest in areas with rising demand, not just on a gut feeling. Want to stay updated? Sign up for our newsletter.
I'd love for you to share in the comments: what's the biggest mistake you learned from this year? What tip would you give a new investor?
First published: 4 September 2026
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