Silves: Financing a detached house on the edge of town for a permanent centre of life
A couple from Hesse – she a tax adviser, he a mechanical engineer – planned a full move to Portugal within the coming two years. Both wanted to continue their professional work partly remotely at first and then spend their retirement permanently on the Algarve.
At a glance
- Purchase price: 714.000 €
- Renovation: 53.000 €
- Financing required: 454.100 €
- Equity: 355.900 €
Anonymised case figure · not a binding statement for other projects · §34i GewO
Quiet living with historic flair in the heart of the Algarve
Silves is one of the most history-steeped towns in Portugal. The imposing castle, the historic old town and the location in the Algarve's hinterland give the town a special character. At the same time, the coastal resorts and beaches are within a short drive. For many German-speaking buyers, Silves is an attractive alternative to the classic coastal towns when a permanent centre of life with more tranquillity and authentic Portuguese daily life is sought.
This practical case shows how buying a detached house for owner-occupation can be financed over the long term and on a solid basis.
Initial situation
A couple from Hesse – she a tax adviser, he a mechanical engineer – planned a full move to Portugal within the coming two years. Both wanted to continue their professional work partly remotely at first and then spend their retirement permanently on the Algarve.
After a longer search, they chose a detached single-family house in a quiet residential location on the edge of town in Silves. The property was convincing for its generous layout, the low-maintenance garden and the good accessibility of the town centre.
Financing overview
- Purchase price: 714.000 €
- Additional costs: 43.000 €
- Renovation: 53.000 €
- Total investment: 810.000 €
- Equity: 355.900 €
- Financing required: 454.100 €
The challenge
The buyers had equity from the sale of their previous property as well as from long-term securities investments. Nevertheless, part of the assets was to be deliberately kept invested in order to preserve financial flexibility for retirement and future expenses.
Before moving in, the house was to be adapted to the requirements of a year-round residence.
Analysis
The property was in good structural condition. The planned investments served to improve living comfort and energy efficiency.
Planned were a new fitted kitchen, the modernisation of two bathrooms, energy-efficient air conditioning with individual room control, the replacement of several windows with thermally insulating models and the fit-out of a generous home office with made-to-measure fitted furniture and modern network cabling.
As all measures were calculated in detail before the purchase contract was concluded, they could be fully incorporated into the total investment.
Financing solution
The financing was set at around 65 % of the purchase price. This kept sufficient equity available as a long-term reserve while at the same time creating a balanced financing structure.
Alongside the purchase price, all acquisition costs and all planned renovation measures were fully integrated into the financing. A later follow-up financing was therefore not required.
Outcome
Once the work was complete, a comfortable home was created that offers the buyers ideal conditions both during the last working years and in later retirement.
The financing remained calculable over the long term while at the same time leaving sufficient financial room for travel, family and personal projects.
What other buyers can learn
Not every permanent residence on the Algarve has to be right on the coast. Towns such as Silves offer authentic Portuguese life, more tranquillity and often more generous homes, without having to forgo the advantages of the Algarve.
Anyone who fully accounts for the purchase price, acquisition costs and renovation costs already at the property purchase creates a reliable basis for the later move.
Frequently asked questions
Why is Silves interesting for owner-occupiers?
Can energy-efficiency modernisations be financed together?
Why is existing equity not used in full?
Which properties are especially in demand in Silves?
Conclusion
Silves combines Portuguese history with a high quality of life and a relaxed everyday life. Financing that takes the purchase price, acquisition costs and all planned renovation into account already at the property purchase creates the basis for a long-term secure and comfortable centre of life on the Algarve.
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Every financing in Portugal is an individual case. In a free initial consultation I will tell you honestly what is feasible and which bank fits.
Book a free consultationAnonymised individual case, not a binding statement for other projects · Siegfried Perini, BAFA-notified for the cross-border activity of the owner Olga Nikushkina · §34i GewO · no tax or legal advice · no financing commitment; conditions depend on creditworthiness, loan-to-value and bank