Discover Portugal’s cities with the highest rental yield for 2025. Find out where investors are achieving the top returns and learn tips for maximizing your property investment in Portugal.

Portugal’s Cities with the Highest Rental Yield (2025 Guide)

Portugal has become a magnet for real estate investors seeking strong rental yields and a stable investment environment. With its thriving tourism industry, growing digital nomad community, and attractive lifestyle, Portugal’s property market offers lucrative opportunities—especially in cities boasting high rental returns. In this guide, we reveal Portugal’s cities with the highest rental yield for 2025 and offer tips on how to maximize your investment in this vibrant European nation.

Why Rental Yield Matters in Portugal

Rental yield is a key metric for property investors, representing the annual rental income as a percentage of the property’s purchase price. High rental yields mean better cash flow and a faster return on your investment. In Portugal, rental yields vary greatly by city, property type, and neighborhood. Investors who do their homework can reap above-average returns while enjoying asset appreciation over time.

Top Cities in Portugal with the Highest Rental Yield

1. Porto

Porto is consistently among Portugal’s top cities for rental yield. As the country’s second-largest city and a UNESCO World Heritage site, Porto attracts tourists, students, and business travelers year-round. The demand for both short-term Airbnb rentals and long-term leases keeps yields high.

• Average Gross Rental Yield in Porto (2024): 6%–7%
• Hot Neighborhoods: Bonfim, Paranhos, Campanhã
• Pro Tip: Properties near the city center and universities fetch higher occupancy rates and premiums.

2. Braga

Braga is increasingly popular with investors seeking high rental returns at a lower entry price. This historic city has a large student population due to its prestigious university, making it ideal for buy-to-let investments.

• Average Gross Rental Yield in Braga: 5.5%–6.5%
• Hot Neighborhoods: São Vicente, Gualtar
• Opportunities: Student housing and short-term rentals for academic tourists

3. Coimbra

Located between Lisbon and Porto, Coimbra is Portugal’s academic hub, home to one of Europe’s oldest universities. Student demand drives strong rental performance and consistent occupancy levels.

• Average Gross Rental Yield in Coimbra: 5%–6%
• Investment Focus: Small apartments and student residences in the university district

4. Lisbon

Though Lisbon’s property prices have risen sharply, Lisbon still offers attractive rental yields in certain neighborhoods, especially for short-term rentals and serviced apartments.

• Average Gross Rental Yield in Lisbon: 4.5%–5.5%
• Best Yielding Areas: Arroios, Penha de França, Marvila
• Insider Tip: Buying just outside the historic center often delivers better returns due to lower purchase prices.

5. Aveiro

Often called the “Venice of Portugal,” Aveiro is a vibrant coastal city popular with tourists and students. Its property market offers good prospects for both short- and long-term rental investors.

• Average Gross Rental Yield in Aveiro: 5%–6%
• Promising Districts: Glória, Vera Cruz

Honorable Mentions: Emerging Rental Yield Hotspots

• Faro (Algarve): Attractive to digital nomads and expats with yields around 5%
• Viseu: Growing demand and relatively low property costs, yields up to 5%

Tips to Maximize Rental Yield in Portugal

1. Target the Right Audience: Focus on students, professionals, or tourists based on city dynamics.
2. Choose High-Demand Locations: Proximity to universities, transportation, and attractions increases occupancy rates.
3. Invest in Quality Renovations: Modern, furnished properties command higher rents and attract more tenants.
4. Explore Short-Term Rentals: Where permitted, platforms like Airbnb can boost annual income, especially in tourism hotspots.
5. Monitor Legal Changes: Stay up to date with local regulation changes affecting rental and licensing rules.

Frequently Asked Questions—Portugal’s Cities with the Highest Rental Yield

Which city in Portugal offers the highest rental yield?
Porto currently offers the highest rental yields in Portugal, averaging 6%–7%, especially in up-and-coming neighborhoods.

Is it better to invest in short-term or long-term rentals in Portugal?
It depends on the location. Short-term rentals in tourist-heavy cities like Lisbon and Porto can provide higher gross yields, but be aware of municipal restrictions. Long-term rentals offer stability, particularly in university towns.

What other factors affect rental yield in Portugal?
Rent control, property refurbishment costs, local demand, and management expenses all impact yield. Always perform a full cost and risk analysis before purchasing.

Where to Find Portugal’s Best Rental Yields

Portugal’s property market remains an excellent choice for investors, especially in cities like Porto, Braga, and Coimbra where rental yields are highest. By focusing on the right neighborhoods, property types, and rental strategies, savvy investors can maximize cash flow and benefits from both stable income and potential capital appreciation.

Are you ready to explore the top rental yield cities in Portugal? Start your property search or connect with local experts to seize the best investment opportunities in 2025!