House in Rua das Mercês, Montinhos da Luz, Luz
House in Rua das Mercês, Montinhos da Luz, Luz — image 2House in Rua das Mercês, Montinhos da Luz, Luz — image 3House in Rua das Mercês, Montinhos da Luz, Luz — image 4House in Rua das Mercês, Montinhos da Luz, Luz — image 5
Grade Bvillaluxury

House in Rua das Mercês, Montinhos da Luz, Luz

Lagos · Western Algarve ·

€1.9M

Asking Price (EUR)

1.9%

True Net Yield (Owner, all-in)

1.3%

True Net Yield (Managed, all-in)

2.8%

True Gross Yield

64%

Occupancy

Projections — conservative (data maturing)

Our Airbnb calendar dataset started 1.3 months ago and is currently at 11% maturity. Yields shown apply a conservative calibration (realised-ADR factor 0.73, occupancy cap 66%) that auto-fades to full fidelity by April 2027.

Projected Gross Revenue: €61,000/yr
Average Daily Rate: €260
Payback Period: 37.9 years
5-yr Capital Value: €2.5M
10-yr Capital Value: €3.0M
Brixfox Score: 60.9 / 100
Comparable Properties: 29
Data Confidence: 96%
Search Radius: 2 km

True Investment Cost

Portuguese transfer tax (IMT) + stamp duty (IS) + notary + registration + legal + renovation + full furnishing & STR launch setup.

€2.1M

+12.7% over asking

Asking price€1.9M
IMT — Property transfer tax (investment schedule)€142,500
IS — Stamp duty (0.8%)€15,200
Notary (escritura)€1,000
Property registry€250
Legal fees (~1.5%)€28,500
Total acquisition costs€187,450
Renovation€0 — move-in ready
Furnishing & STR launch (3bd × €8000 base, luxury tier)
Furniture, appliances, electronics, linens, AL licence setup, launch photography.		€53,300
All-in investment (incl. renovation & furnishing)€2.1M

Gross yield (asking price)

3.2%

True gross yield (all-in)

2.8%

Estimates use Portugal's investment IMT schedule (non-permanent residence). Actual notary & legal vary; budget +€500–1,000 for surveyor, due-diligence and bank-mortgage fees if financing. Renovation cost is a heuristic on property condition × m² — verify with a site visit. Furnishing uses finish-level-tiered rates covering beds, living, kitchen, electronics, AL licence, linens & professional photography. Working capital (2-3 months operating buffer) not included.

Bedrooms: 3
Bathrooms: 3
Building: 790 m²
Land: 790 m²
Style: modern
Condition: new-build
Year Built: 2023
Energy Certificate: A
Private Pool
View

AL Licence Status Unconfirmed

AL licence status unconfirmed — verify before purchase

Design Features

infinity poollarge glass facadesmulti-level terracesminimalist white architecture

Score Breakdown

ROI
10.76
Visual Appeal
10
Ownership Security
13
Location
8.4
Land & Space
9.33
Rental Demand
6.44
Payback Speed
0
STR Suitability
3

Description

Located in a prestigious development in the charming and popular town of Luz, built to exacting standards and enjoying beautiful sea views. With a fully fitted and equipped kitchen, landscaped garden with boundary wall around the entire property, electric shutters and blinds, 3 en-suite bedrooms, plus guest WC, garage

Location

📍 37.0878°N, 8.7360°W

· Lagos, Algarve, Portugal

View on OliveHomes.com →Also on Idealista.pt
Idealista.pt
Lagos / Western Algarve

House in Rua das Mercês, Montinhos da Luz, Luz

Inventory
3 Beds
Bathrooms
3 Baths
Built Area
790 m²
Land Plot
790 m²
Tenure
Freehold
Yield Curve Status

Grade B investment — short-term rental yields 2.1% net return annually.

Go to Source via Idealista.pt

The Investment

Brixfox Score61
GradeB
Brixfox Intelligence
61BStrong
Score Breakdown
ROI & Yield67%
Capital Growth64%
Risk Profile63%
Market Demand61%

The Brixfox Score is our proprietary AI-powered rating that evaluates rental ROI, capital appreciation potential, risk factors, and local market dynamics to give you a single investment quality metric.

Pro members get full score breakdown with AI recommendations
Average annual ROI over 5 years, combining both rental income and property value growth.
Total
+7.6%
Per Year (5yr avg)
Annualized projected property value change based on historical area appreciation rates (5-year average).
Capital Growth
+5.5%
+$525K in 5yr (+28%)
Estimated monthly net income after deducting management fees, operating costs, and taxes.
ROI Nett Rental Income
2.1%
$3,618/mo
Estimated time for the total investment value (equity + accumulated rent) to double.
100% Profit
12 yr
Combined
Number of years to fully recoup the initial purchase price using only net rental income.
Payback
47.6 yr
Rental only

Property details

Year built: 2023
Energy: A
Condition: new-build

Description

Located in a prestigious development in the charming and popular town of Luz, built to exacting standards and enjoying beautiful sea views. With a fully fitted and equipped kitchen, landscaped garden with boundary wall around the entire property, electric shutters and blinds, 3 en-suite bedrooms, plus guest WC, garage

Income Breakdown

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Nightly Rate (ADR)
$385/night
50% ($177)Brixfox estimate($385/night)200% ($708)
Occupancy
64%
10%Brixfox estimate(64%)100%

Short-Term Rental

Yearly income
$43,411
Airbnb data$385/night · 64% occupancy
Rental income
$385/night · 64% occ.
$90,434
Running costs (20%)
Utilities, cleaning, maintenance
-$18,087
Income tax (10%)
Indonesian rental income tax
-$25,321
Property tax
Annual property tax
-$3,614
Net income
2.1% ROI
$43,411

Long-Term Rental

No long-term rental data available

Not enough comparable rentals in this area

True all-in investment

What the headline asking price actually costs once mandatory taxes, fees, renovation, and furnishing are added. Yields rebased onto this number — closer to what you'll really earn against what you'll really pay.

Asking price$2,065,217
IMT (transfer tax, investment schedule)$154,891
Imposto de Selo (stamp duty)$16,522
Notary & registration$1,359
Legal / due diligence$30,978
Total acquisition costs$203,750
RenovationMove-in ready
Furnishing & STR launch
3bd × $8,696 base + appliances, electronics, outdoor, licence, photography, linens.		$55,761
All-in investment$2,324,728

Gross yield (asking)

4.4%

True gross yield (all-in)

3.9%

Estimates use Portugal's standard transfer tax + typical legal/notary defaults. Verify with local counsel before committing — actual fees vary by deal structure.

Growth & Exit Strategy

How your investment grows over time

Freehold — 4%/yr appreciation in Lagos.

$9.3M$7.0M$4.6M$2.3M$0Yr 0Yr 5Yr 10Yr 15Yr 20Yr 25Yr 30Paid back2x ReturnToday: $1.9M
Capital appreciation
Property value growing at +4%/yr based on Lagos market trends.
Rental income
Cumulative net rental earnings collected over time, growing with annual revenue increases.
Total return
Capital value + rental income. Your actual total position if you sold and kept all rent.
Paid back
Year 30: rental income alone has repaid the full purchase price.
2x return
Year 14: total gains (capital + rental) have doubled your initial investment.
Year 5
Capital Value
$2.3M
+22%
Rental Income
+$212K
Total Position
$2.5M
+33%
5.8%/yr
Year 10
Capital Value
$2.8M
+48%
Rental Income
+$458K
Total Position
$3.3M
+72%
5.6%/yr
Year 20
Capital Value
$4.2M
+119%
Rental Income
+$1.1M
Total Position
$5.2M
+176%
5.2%/yr
Year 30
Capital Value
$6.2M
+224%
Rental Income
+$1.9M
Total Position
$8.1M
+324%
4.9%/yr

Location

Lagos

Western Algarve, Approximate area

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Villa Scorecard

Location
Average
Emerging or secondary location
Rental Yield
Weak
2.1% annual return
Occupancy
Good
64% average occupancy
Nightly Rate
Strong
$354 per night
Visual Appeal
Strong
9/10 instagrammability
Size & Space
Strong
790 m² land area
Zoning
Average
STR zoning not confirmed
Tenure
Strong
Freehold ownership

Top Highlights

Premium nightly rate of $354 — positioned in the top tier
Stunning visuals with 9/10 instagrammability — commands premium nightly rates
Generous 790 m² land — room for expansion or amenities

Watch Out

Secondary location — rental demand may be lower than premium areas
Yield of 2.1% is below the market average — model your cashflow carefully

This villa is a strong investment. High rental demand and good returns make it suitable for both active and passive investors.

Risks & What-If

What if occupancy changes?

Owner Managed scenario

44% occ.
1.9%
$3,335/mo
54% occ.
2.4%
$4,155/mo
64% occ.
2.9%
$4,974/mo
current
74% occ.
3.4%
$5,794/mo

Data Sources & Methodology

ROI calculations use verified Brixfox Intelligence rental data from a 12-month trailing window. Opex: 20% owner-managed, 45% fully-managed. Includes 10% Indonesian rental tax (PPh) and annual property tax (PBB). Market factors in Portugal may impact actual yields.