While Lisbon yields have dropped to one percent, Portugal's interior cities like Évora and Covilhã offer returns up to five percent.
You can find properties in Guarda and Covilhã for thirty to fifty percent less than in major coastal metropolitan areas.
Évora remains a stable choice for retirees and investors due to its UNESCO heritage status and consistent tourism demand.
For higher yields, Covilhã provides a strong student rental market, though many properties require twenty to sixty thousand in renovations.
Buying in the interior also saves you money on taxes, with reduced property transfer tax rates as low as zero point five percent.
Remember that these regions face flat demographics, so you should prioritize immediate rental yield over long term price appreciation.