H08E - Property Management

If you do not intend to live permanently in your Portuguese home, how will you maintain the property during your absence? You may wish to find some form of property management. 

To offset some of the costs of this management, you may also consider letting your home on a short-term basis for holidays. Bear in mind though, that the peak holiday season (June to September) is the time of year when you are likely to want to occupy the house, that the average occupancy even in the Algarve is around 35%, and short-term visitors can cause a lot of extra wear. 

Letting and property management agencies 
If you have bought a property on a managed estate (empreendimento) it is likely that the purchase will include an agreement with the estate management company, which may also include management and letting services for your house. If this straightforward solution is not available, you will want to consider how to let and manage your property. 

There are international tour operators and overseas agencies specialising in holiday lets and some local villa management agencies already have agreements with overseas letting agencies or provide a letting service locally. If you only intend to let occasionally you may prefer to find your own clients. 

There are some online organisations such as Airbnb, HomeAway, Booking, etc., can be of great help to promote your property.

Having decided to let your house or to keep it available for your own use, there is a range of management services that you may require, such as to: 

• Pay utility bills and local taxes on time.

• Maintain the garden and pool.

• Clean the property and its surroundings.

• Provide a security service.

• Inspect the property regularly and supervise emergency repair works.

• Supervise small maintenance works.

• Supervise local staff.

• Keep a list of contents and carry out a regular check.

• Ensure the legal requirements for letting are met. 

• Keep the house and contents insured.

• Prepare the house for each letting, receive the guests, provide an introduction to the house, and carry out a final inspection before they leave.

• Provide information and other services to guests.

The property manager should be able to speak good Portuguese, have a good knowledge of letting laws and staff employment, be able to provide regular accounts of the expenditure and income, and submit regular financial and maintenance reports to you in your own language. 

A professional property management agency is most likely to be able to provide all these services and will charge in accordance with the services to be provided under contract. Since you are entrusting a major asset to their care, a formal contract drawn up or reviewed by your lawyer would be advisable. 

You may prefer to contract the management of your house to an individual you know personally living nearby. This may have the advantage of a more personal service and provides the opportunity for more frequent inspections. However, a written agreement specifying their responsibilities would be advisable, as would a payment to compensate them for the time they spend on your behalf. 

Legal requirements for holiday lets 
Houses let for short-term holiday stays must meet certain minimum requirements, as set out in the tourist property law.

Properties for holiday lets must be registered with the local Council and the tourist authorities. They must meet certain minimum standards in terms of size, services and furnishings and be insured against accidents involving guests and for public liability. There are specific safety standards for swimming pools, gas appliances, fire protection and chimneys. Gas installations must be inspected by an officially registered inspector and chimneys should be cleaned regularly. There must be a first aid kit on the premises, as well as smoke detectors, and a fire extinguisher in the kitchen. 

When guests arrive, they should be registered, provided with information about the property and local facilities, and have access to a complaints book. Your management agent should be able to prepare your property for holiday lets and register it with the authorities, as well as carry out the registration and reception of guests.

Accounting and taxation of rental incomes 
Income from holiday lets should be declared to the tax authorities, even if the owner is not resident. Double taxation agreements may limit your liability to pay tax both in Portugal and your country of residence. The costs of property management, letting agency fees and maintenance costs can be off set against this tax. It is therefore important that your property manager keep proper accounts that are provided to the accountant who submits your tax declarations.