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Buying Rural Property – Welcome To The Awkward Squad

Article published with permission from Portugalresident.com.

The old adage of ‘market value is what someone is willing to pay’ often is heard when a property has changed hands at an inflated price.

Some foreign buyers of properties in Portugal’s increasingly popular inland areas have been left with chronic post-purchase blues when discovering that equivalent properties were available at prices well below what they paid.

Desk research is essential for buyers to acclimatise to market conditions and there are many portals and estate agency websites that are easily searchable with helpful criteria such as price band and location. Much can be gleaned online, but there is no substitute for being in the country and refusing to be rushed while ignoring claims that ‘there’s another bidder’ or ‘the owners are going to put the price up’.

Set aside adequate time for viewings, learn about the selection and buying processes, network and get to know different areas of Portugal’s interior.

Desk research is an essential start point
Desk research is an essential start point

If you are dealing with an estate agent, ask questions. When you select a lawyer, essential for checking paperwork, ensure that all your questions have been answered and, if you are uneasy, get a second opinion. Never be pushed into using a lawyer that has been suggested by an estate agent.


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One often can spot how long a property has been on the market by its agency reference number and out of season outside pictures indicate the listing’s age.

Learn to spot what has been omitted in a property listing. Check that a ‘building’ is, in fact, a habitation and not a storage shed. If it is a habitation, check there is a valid habitation license or exemption certificate and check with the Câmara that, if a project is submitted, a change of use will be granted.

House in Figueiró dos Vinhos
House in Figueiró dos Vinhos

On cost grounds, you need to know the distance to an electricity supply and if the water company is/has been supplying the property. Don’t rely on a well for drinking water, or a fresh-looking stream which may dry up in the summer. Sinking a tubewell is expensive and there are looming licensing issues.

Check whether telecoms service provision is fibreoptic, test the signal strength for the main mobile network suppliers, look at the roofline which, if undulating, suggests wooden beams that need replacing. Visit at different times of day and at weekend to check for dogs barking, music blaring and motors running.

Access – a dirt road in summer is markedly different in the winter months.

Become expert in orientation, how a building is positioned in relation to the sun’s path in different seasons, as well as prevailing wind patterns.

Sertã farmhouse, the newly installed roof is a bonus
Sertã farmhouse, the newly installed roof is a bonus

Perhaps most importantly, there’s zoning, the categorisation of the location in which the property sits. Zoning includes categories such as urban, historic, protected national park, forestry, agricultural, ecological and the area’s fire risk rating. Obtain copies of the property’s documentation, check the BUPi listing, and, if there is no record, have a survey carried out if the land areas are stated in round figures.

Obtain estimates for repairs and upgrades to electrical and water systems. Factor in the costs of a heating system and insulation, new windows and a new kitchen.

You will soon get in the habit of being awkward, but for good reason. Become obsessed with detail.

‘Asking the Câmara’ is a straightforward process in the interior and a vital step in understanding what you can and can’t do with a property.

Good agents will know the answers to many of these questions but always double-check.

Equipped with detailed knowledge about your potential purchase, price negotiation can begin. There’s no proven equation, many properties are sensibly priced but others may be overpriced and this is where the fun starts.

Rural Properties’ recent purchase of a farmhouse near Figueiró dos Vinhos was secured at a 22% discount, despite the agent’s insistence that the seller would never drop below a certain price point. By justifying an offer price with a costed list of the work required to make the property into a home, while offering a swift completion date, an agreement was reached.

View from the Castelo property’s garden
View from the Castelo property’s garden

Similarly, a stalled renovation of a farmhouse near Sertã was secured this month at a 32% discount to list price. This property also benefits from a new roof. The negotiation was protracted but, while explaining the redevelopment costs involved, we stuck to a low figure.

By adding detailed costings to the negotiation and offering completion within a month, the seller was assured that the offer was serious and, however painful, to be considered carefully.

Sometimes a property looks good on paper and, in reality, is perfect, fitting all criteria – the most important one being ‘location’.

Figure 2 Potentially interesting but full of obstacles
Figure 2 Potentially interesting but full of obstacles

At other times, a potentially interesting property turns out to be inappropriate for renovation and resale, such as the one below which, despite lying one kilometre from a popular town and set back nicely from the road, has land division issues, expensive access problems and a commanding view of a warehouse, despite an enticing listing photograph.

In conclusion, search in depth and find what you love, research the property thoroughly, get to know the area, don’t be rushed and do negotiate – it’s your money.

By Paul Rees

The author runs Rural Properties, an innovative business that invests in the Central Region, buying, renovating and selling properties. For investment enquiries: www.rural-properties.com or contact info@rural-properties.com


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