Profit in Portugal

In this episode of Notes From the Field, Ronan McMahon reports from Lagos on Portugal’s Algarve coast, where rising demand and tightening inventory are driving a powerful real estate boom.

Broadcasting from a three-bedroom condo overlooking the Lagos marina and the Atlantic Ocean, Ronan shares his latest boots-on-the-ground research into one of Europe’s most desirable lifestyle destinations. From growing international demand to shrinking resale inventory, the forces shaping the Lagos market are becoming increasingly clear—and increasingly powerful.

For investors who secured early opportunities in Lagos developments like Adega, Dona Maria, and Dona Anna, the results have been dramatic, with significant capital appreciation and strong rental demand already taking hold.

But beyond the numbers, Ronan explains why Lagos has emerged as a fully livable international beach city—attracting retirees, remote workers, and lifestyle buyers from across Europe and North America.

In this dispatch, Ronan breaks down what he’s seeing on the ground today, why inventory is becoming increasingly scarce, and where he’s searching for the next “Lagos-style” opportunity along Portugal’s coast.

In This Episode

Ronan discusses:

• Why Lagos has become one of the Algarve’s most desirable real estate markets
• The international demand driving the city’s rapid growth
• How tax incentives and lifestyle factors are attracting European retirees
• The influx of North American buyers and digital nomads
• Why resale inventory has become extremely scarce
• The strong appreciation seen in RETA member opportunities
• The quality and positioning of projects like Adega, Dona Maria, and Dona Anna
• The coastal areas Ronan believes could become the “next Lagos”

Key Takeaway

Demand for real estate in Lagos continues to surge while available inventory shrinks—creating the kind of scarcity that has historically driven some of the strongest real estate gains in international lifestyle markets.

Transcript

SPEAKER_00 0:12

Welcome to your notes from the field. This is where I bring you my latest boots on the ground research. Research you can profit from, and profit certainly is the name of the game in Lagosh today for Rita members where I'm talking to you. So to orient you, I'm sitting at a fabulous table in a beautiful Edega three-bedroom condo. I'm looking out to the marina and beyond to the Atlantic. Beautiful fall weather, weather in the the kind of the low to mid-70s. I've been swimming every evening in Porto Damas. I'm yet again charmed by by Lagos, and I'm absolutely charmed by the location of these Adega condos. But I guess to quickly jump back and to recap and to reorient, Lagos is a charming beach, an old town and marina town towards the the western edge of Portugal's Algarve. Now with the latest new highways and the various kinds of path of progress that have rolled out here over the past number of decades, it's now only a 50-minute drive from Faro's International Airport. And Faro is an airport that connects to almost every city and mid-sized city in northern Europe. So for example, my hometown of Cork in Ireland has at least two flights a day to Faro. You know, cities in the UK. You could probably fly to a dozen cities in the in the UK from to Faro. So this is an extremely accessible place for northern Europeans to come for vacation, to come for some winter sun, to come and retire. You have beaches, you have coves, you have surfing, you have kayaking, you have golf, you have pretty much everything. It ticks an awful lot of boxes for an awful lot of people, therefore making it highly, highly desirable, and therefore driving demand for it as a second home, a place of primary residence, because um working working from working from home and also as a retirement destination. So the drivers encouraging, so you know, those are the pull factors. The pull factors are you know, Lagos is just a truly special place and a wonderful place to spend time. Um, you know, I personally feel that I'm coming here on an extended family holiday next Easter. So I I always think it says a lot when you know, out of all the places I visit and spend time when I pick a place to organise a family event, for example. Um so it's extremely desirable here, it's accessible, and then we have the push factors that are driving people here, and the push factors are weather and high taxes in places like Scandinavia. So now this time of year, um believe me, I've just come from eastern Scotland. If you hear a cold, that's a Scottish cold, that's a legacy from um three days battling the weather and the elements on some of Scotland's finest golf courses. So it was a fabulous trip, but I was left reminded how bleak and desolate and damp and cold these places become this time of year. So you have Scandinavians who can choose weather and who can choose to pay to pay one-fifth of the taxes that they that they do back home. So this is a really, really powerful driver. Um, Europeans can move here, and the tax they pay on their retirement income goes down from between 50 and 60 percent to 10 percent at the stroke of a pen. Um, there are French doing doing that here here as well. So you've got a since COVID in particular, you've had a big influx of European retirees um looking for more freedoms, looking for better weather, looking for a better quality of life, looking for lower taxes. Um in this past week I've been absolutely struck and blown away by the number of Americans and Canadians here now, also. So there's been a big flux of kind of 30-somethings um North Americans who are clearly here, um remote working, being digital nomads, traveling. Um and they're you know, I I see them in the various kind of real estate projects and and communities that that I've been visiting. And these are, you know, these are both those 30-somethings and also these American retirees who are here on on vacation are making extended stay. So many of those are here because they they see hear the Southern California of of old. They see here what kind of what drew them to maybe West Coast US living um 30, 40, 50 years. And they see that they can have that here now. They see that they can have lower, low taxes, low cost of living, security, great value, well relatively inexpensive real estate compared to back home, um, and just this sense of space and freedom and you know limited traffic issues. Although, you know, traffic can be can be can be an issue here in the in the peak summer months, and that's why I I don't want to be here in the in the peak summer months. Um so the draw of this place, so Lagosh has really come into come into its own as a as a destination and as a fully livable beach city. I mean it's in my past visits I've typically stayed in Porto Damas area, which is about a it's a nine-minute drive just around town from from the Adega building. I like to stay out there because I could rent condos right overlooking the beach. There was no availability when I went to book there this time, so I I booked in in Adega, and I'm absolutely delighted that I did because um because the benefits and the appeal of being right downtown um you know certainly is is is comparable to Porta de Moss to be able to walk to the marina, to walk to Mea Praia, the big wide curve of beach, to to walk to to the old town, and then to be to be really, really accessible to to Porta de Moss, which you know that this is my personal preference as a as a beach I like to go to because it's long, it's very walkable, and there's some really nice, um, really nice beach bars and and and restaurants. So the the takeaway from all of this and where I'm going is that what I've been telling you about Lagosh is absolutely playing out. Um demand is soaring, best in class inventory is scarce, and values are rising fast. So, to give an example, um over the past two days, we've had two knocks on the door here by cold calling, cold calling brokers looking to know who owned who owns the property and would they list it. Inventory in best in class projects, communities, locations like here in Edega is so tight that brokers are spending their time knocking on doors trying to get listings, and I'm I'm literally meaning knocking on doors. I'm not talking about putting flyers under doors. They literally have customers, but they've nothing to sell them, so they're going door to door to find customers. The resale market is particularly strong, um, is particularly strong. There have been a a number of of Rita members who have who have sold on condos here here at Adega at prices that are you know 190 and more than 200,000 um euros more than more than their their Rita pricing. And that's pretty exceptional when you consider that the way to buy here in Portugal is with uh with a mortgage. So Rita members have been able to 3x their money over a period of three years. So, you know, three times your money over a three-year period with a very, very low risk um opportunity, like a condo here. And the the the the low risk is because you know once they get built, you know, barring something absolutely catastrophe, like a repeat of the tsunami of the 1700s, or Portugal becoming enmeshed in a in some big war, but barring something absolutely catastrophic, you're going to have renters here, you're going to have people who want to stay here, and you're going to be able to cover the costs in including your mortgage. So congratulations to Tarita members who've who've got in. And I've been highly, highly, highly impressed with the quality of construction and the quality of finishes here here at Adega. You know, it's it's it's high-end central air. You move the dial by half a degree and everything reacts. You've got fabulous electric blinds, you've got big, heavy, you know, big, robust, well-built um sliding, sliding doors. You've got marble up the walls of the bathrooms, you've got a beautiful, fully fitted kitchen. Everything is everything is top, top class, these big spacious terraces that are a whole extra additional living space. So that bodes really, really well for for Rita members who've bought in Donna Anna and Donna Maria because it's the it's the same developer behind Adega that's also behind these other communities. And you know, this is a this is a local family that are committed to quality, and they're always going to be, they're always going to be around, they're always going to be close to their customers. So quality is is very, very important. But you know, I can just see how they haven't cut corners on the construction of these condos, and everything is everything is higher end than than than I expected. So these are you know top level, extremely well built, luxurious condos, you know, in the heart of you know, this this emerging, this kind of fast growing beach city where there's where where there's already this scarcity. So the scarcity I told you about earlier, we can see it in brokers going door knocking. Um I was talking to a contact yesterday who who's got a business here selling real estate. He said his number of listings has gone down from 1200 to about 140. He's a major player on the Algarve. He told me a story about smaller players here in Lagosh who historically would have had kind of maybe 50, 50 to 60 listings. Now some of them are down to between zero and two listings. So you've got offices of of people just just twiddling their fingers. So this scarcity is really, really biting, and more people are coming, and no one wants to sell because why the hell would you sell when the rental market is so strong? And where else are you going to generate the the type of income stream that you can you can get from a rental in a place like Lagos? So um, you know, I'm absolutely tickled pink and delighted to see how how Lagosh is is is working out for our for our Rita members. And remember with Portugal, the deal is very, very much sweetened by the fact that by the fact that foreigners can borrow up to 80% at extremely um low interest rates. And um so this makes your your cost of ownership extremely extremely low. So congratulations if you got in on you know any of our lagosh opportunities. They've all come from two developers that are part of the same family, although they very much, even though their businesses are very, very much independent, and um, but they're both absolutely committed to quality, and because of these two groups, land banks and capacity to buy new land, we've been able to get in on best in class projects in the primo locations in all of Lagosh at you know exceptional pricing, and Rita members are are now reaping the rewards. You know, if I just kind of turn my head out my terrace and around to the left, I see Donna Maria, and that's that's flying up and is is the is when delivered is going to be the landmark project in in all of Lagos. You know, the developer told me when he was getting started that this was going to be about legacy, and it is, it's going to be a defining project with with unrivaled and never to be had again views um over the marina and across to Meya Praia and to the sea. It's going to be absolutely special. And Donna Anna, you know, it's the I was here around this time last year and saw the the demolition of the shell of a project next to Donna Anna. That's now flying up. Prices there are are through the roof, and Earth movements, as you know, are as Rita members who have got in on Donna Anna, Earth movements have started, and the developers getting ready to start construction any day now. And again, that was a stellar deal when I launched it to Rita members tail end of last year, a year on, um, as Rita members have just been closing over the past couple of weeks, it's looking even better because um because just in this past year, there's just been this acceleration of scarcity and very, very significant market uplift. So all my expectations that I had um about the future, future prices and rental income for Donna Anna, um, all those expectations I had a year ago, you know, I've revised them significantly up because the market has moved and what we've been able to get in has just become more scarce. So um that's the good news. The bad news is new inventory in Lagosh is going to be tricky to find. Um I've looked at a number of land parcels um with some of the the top developers. Um there's a couple of there's there's there's possibilities, but I just don't know yet if or how they're going to materialize in in anything coming close to kind of what I consider a read a grade opportunity. I'm hopeful again because we're we're talking to the top people with land banks and who have more capacity to work their business model to to give us the the type of below market pricing that we expect. But it's a serious thing, this this inventory scarcity on the Algarve in general and specifically in Lagos. So I guess that brings me on to the next question about where's where's the next lagosh? How can we be how can we take what we've learned here in Lagosh and be out ahead and and find that next place? So this is very interesting. I've you know I've been going in in all directions, you know. First of all, I thought the the next Lagos might be, you know, that the path of progress and development would flow out towards Sagres. So that's just going straight west of Lagos. You have a number of beach towns out there. I've looked at multiple current, past, and planned opportunities out there. Nothing has really got me that excited yet. Um, but there is an area that's got me super excited, and that is the stretch of coast that's west facing in the Algarve. So I'm talking about um the area just north of Al Jasur. So if you if you think of, and I'll drop a map below, if you think of the the Algarve, you know, our general orientation draws us along the coast to Lagosh, and then you continue on to um you'll continue on to to to Sagres and then the you know the most southwesterly point in in all of in all of Europe but there's also a west facing part of the Algarve coast which is north of that point but the way the road infrastructure and the national parks work um it isn't that it it doesn't the the the infrastructure doesn't work that way in terms of in terms of connecting you so by that I mean you don't drive to the south most southwesterly point and then hang aright because there aren't roads and there's national park and there's other stuff but driving from Lagos towards Al Jasur then hit the coast and it is just absolutely beautiful that drive it reminds me in part of of the silver coast you step back by three or four decades within kind of 15 minutes drive of all the writs and the glitz of of Algarve you are of Lagos you step into Portugal from three or four decades ago and then you just drive to the coast and there's very early stages of tourism surfers hikers adventurers but none of the none of the mass market stuff none of the champagne bars that you have here in Lagos and it is just wildly beautiful and um I'll drop a few photographs um below below this this recording in to to tell you what or to show you what what I'm talking about but it is just wildly beautiful and um I see huge potential because you have this wild rugged natural beauty and it's more exposed than lagos and you know that's a that's a a problem for some sun seekers and maybe for families who are looking for for for for good weather but for the types of people like me who've been drawn to areas like the Silver Coast you know in many ways it's like the silver coast but with better weather so there's this is this is kind of the the the the interesting twist because for for people say from the eastern Algarve they think of the the weather as being wild and and bad but for for someone like me coming from the silver coast it's like silver coast weather just sunnier and warmer and and and and better in winter and there's just such and there's just such growing demand for that type of active lifestyle with you know with with surfing with long walks on the beaches with with hiking with absolutely beautiful nature but still remember you're you're within 30 40 minutes of lagosh and you're within an hour and 20 or an hour and a half of of of of faroes airport and you don't need to go to to Lagos for you know there's still a lot of services out there. So that area is is absolutely stunning and as for potential developments out there and potential opportunities to profit I'm scratching I'm I'm looking and the I'm also looking at at land opportunities it could be that we're too early to buy kind of retegrade condos but like our Montenegro idea the play there is to to buy land ahead of development coming so stay tuned watch this space as um as as far as the kind of the lagosh path of story path of progress where's the next lagosh this is something that's kind of preoccupied me over the over the last couple of years is finding where where the next place will be. But it's also a very interesting thing because the next lagosh could be a neighborhood of lagos that's going to get kind of somewhat gentrified this has been the kind of the Playa del Carmen experience and the Riviera Maya experience is that the the these path of progress events don't happen all in one direction and all in a straight line they kind of bounce around we saw we saw Playa go through a development spurt Playa del Carmen then development goes to Tulum then development bounces back to Playa del Carmen with gentrification of certain neighborhoods and new areas opening up so I'm also pounding the pavements in in Lagos looking for ideas and parts of town that are somewhat off the beaten track now but as Lagos go grows will become more more and more central and and desirable so um thank you and um forgive the cold and congratulations if you've got in on any of our any of our lagosh opportunities and for those of you that are coming to the gathering looking forward to seeing you there and um it's gonna be a lot of fun.