Hello Kate,
Although I'm Portuguese, i left the country many years and in the last 10Y I've been living Belgium (Brussels), where together with my wife we have invested in real estate / property management.
Over a year ago we moved to Portugal (Lisbon) with the kids and we live between Brussels and Lisbon. Similar to what we do in Belgium, we will be investing in Portugal and we started analysing the market.
I have no knowledge on the VISA topic so can't help you on this one.
-> Regarding the short / long term rentals:
- short term: tourism is one of the main sources of income of the country and therefore has lots of potential. Having that been said, the barriers to entry are very low, which makes it one of the easiest countries for anyone to start doing Airbnb, when compared with other countries. The downside is that everyone does it and unless you have something quite unique, you will deal with lots of competition and seasonality. In addition, a trend has started in some cities (i.e Lisbon) to incentivise owners to move their Airbnbs to the long term.
If you would like to do a market analysis on the short term rentals, I can send you some links of tools that are helpful (i.e Airdna) where you can check occupancy rates, average rates, etc.
- long term: there is a shortage of properties in almost all cities and in some cases and that has contributed to an increase of rents and prices in double digits in some cases. i.e Mafra 10% rent increases last year and Setubal +15% price increase. With this in mind, doing the market research well is key and I can share with you some tools / websites that i used for my own (for example idealista data or national stats), so you can check in which cities population is growing (just a few), unemployment rates, rent/buying $ per m2, etc.
-> Funding: you can consider as options mortage brokers who can scout/compare the best offers in the market and you can also consider public funding programmes that exists as an incentive to renovate and bring houses to the market, either for tourism or traditional rental.
As an example, on the traditional rental there is a funding program ("Arrendamento Acessivel") that funds up to 90% of the project and can be used to cover part of the renovation costs, as well as, part of the purchasing. The caveat is that until the loan is paid back, you must put it in LT rental at capped rents. For tourism you have several, including one (IFFRU) that can fund up to 100% of the renovation costs (no purchase).
You can do your own research but you have companies / consultants who this job for you and charge a success rate (pay only if funding gets approved).
-> Besides doing your market research, i strongly advise that before any purchase or offer, that you hire professionals to help you in the process. Hiring an architect to assist you costs a few hundreds of EURs and they will check that the property is legal, they will take the right measures (in the end you often buying per m2) and guide you along the process. Additionally, an "avaliador" is someone you can (i recommend) hire to give you an idea of the market value of the property. They do an inspection, look for potential costs with repairs and produce a final report. This also costs 200-300 EUR depending on what's included. This are the best few hundreds of EURs you will invest and can save you thousands.
On my case, i'm currently in the process of investing in 2 properties in Sagres for tourism, as the zone belongs to a natural reserve and supply is very limited (i also hired the 2 ppl i mentioned above). I'm also analysing cities to invest in multi-family.
Don't hesitate to reach out as I'll be glad to help if i can and I would love to hear about your journey investing in Portugal.
Cheers
Joao Antonio
