In March 2020, we received a request to find a small apartment “by the sea” with a nice view and close to the beach, for subsequent renovation.
The client is a keen surfer, so having a beach within walking distance was crucial.
A T1 apartment with an area of 40 square metres in Carcavelos was found, two minutes from the beach. The asking price was 240 thousand euros. As a result of negotiations, the price was successfully reduced to 215 thousand euros.
The banks were prepared to provide a mortgage loan amounting to 70–75% of the flat’s value. Novo Banco, however, agreed to grant a non-resident customer a mortgage of 80% of the value.
The cost of purchasing the flat, commissions and taxes
The initial mortgage deposit is 43,000 euros (20%). The loan amount is 172,000, the term is 30 years, the interest rate is 1% per annum, and the monthly repayment is 573 euros.
Initial costs (€12,400):
Bank: loan disbursement 333, valuation 322, formalities 156, draft fee 42. Notary’s fee for registering the mortgage 450, stamp duty 437. Lawyer’s fee 920 euros. Flat insurance: €123. IMT tax: €6,887.
Periodic costs (€800):
Mortgage €573, electricity €56, water €35, service charge €36, internet €35, mobile phone €26, IMT (local tax) €16, home insurance €14, account maintenance fee €9.
Cost and repair process
The renovation costs €650 per square metre, calculated by floor area. This includes both the labour and standard materials. The flooring, electrical wiring, plumbing, doors and windows are completely replaced.
Add VAT at 23% on top (if we’re doing everything through official channels), which brings the total to 800 euros per metre.
In total, the renovation cost €32,000. Timeframe – 2 months. As the decorators are extremely busy (booked up for a couple of months in advance for sure), planning needs to be done in advance.
It should be added that the cost of repair depends on the materials and, at the customer's request, the materials can be purchased separately. In that case, the work will cost half the stated amount.
Today, comparable apartments in the same location cost 265 thousand.
