Best rental yields in Lisbon

Thinking about buying property in the Portuguese capital and looking for guidance on the best rental yields in Lisbon.

Lisbon attracts buyers from across the world and from within Portugal. It is a major centre for business and tourism, which keeps rental demand strong. This makes the city a good place to explore if you want stable returns and long term value.

You can use our calculator to get an instant estimate of the passive income potential of any property in the city or continue reading to learn where the best rental yields in Lisbon are currently found.

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Investing in property in Lisbon?

1. Where to buy real estate in Lisbon

Lisbon is known for its beauty, culture and lifestyle. Visitors and residents enjoy a great selection of restaurants, bars and cafes.

While it is the most expensive city in Portugal for real estate, the average price of around six thousand four hundred sixty one euros per square metre is still more accessible than major European capitals. This helps investors search for areas with the best rental yields in Lisbon at a competitive entry price.

Data from Statista shows that Lisbon ranks tenth in Europe for investment prospects in 2025. Below you will find the neighbourhoods that offer some of the best rental yields in Lisbon this year.

Buy-to-let Barrio Alto

• 3% annual yield 
• €6,821 per square metre

Bairro Alto is lively in the evening and calmer during the day. It remains popular thanks to its central location. This Lisbon yield isn’t the most expensive area, but it’s not the cheapest, with an average property cost of €6,821 per square metre in 2025. Also, while there’s a lot of demand for rentals in Barrio Alto, the average yield is around 3%, which isn’t the best you will find in Lisbon’s city centre.

Buy-to-let Chiado

• 3% annual yield 
• €8,000 per square metre

Lisbon’s most elegant shopping neighbourhood was mostly renovated by architects; Alvaro Siza Vieira and Aires Mateus. Known as a meet-up for dining and going on nights out, Chiado is the most central refined neighbourhood in Lisbon downtown.

Annual yields can go up to 3% in long-term reservations, but being a touristy central area makes it more appealing for short-term rental businesses.

If you want to buy in Chiado, you will pay an average of €8,000 per square metre, which is more expensive than Barrio Alto and Lisbon as a whole. Still, given the thriving local scene in Chiado, this is definitely one of the hottest places to buy in Lisbon, and you can be sure of a thriving short-term rental market if you invest here.

 

 

Buy-to-let Avenida da Liberdade

• 2.5%-3% annual yield 
• €10,300 per square metre

Here you will find the highest square per meter in the country. Only exquisite buyers want to buy in this area because of its international shops, status, and lifestyle.

Avenida da Liberdade runs from Restauradores Square to Marquês de Pombal Square, for a 1.6 km and more than 90m wide. It’s a sophisticated avenue with graceful trees and cafe terraces on cobblestone pavement. If you’re looking to buy luxury properties, here’s your place.

Buy-to-let Príncipe Real

• 3%-3.5% annual yield 
• €7,317,07 per square metre

Príncipe Real atmosphere is a mix of sophisticated hipsters with local bio hippies. Here you’ll find beautiful apartments and an incredible social life around the terraces and gardens in the neighbourhood. Príncipe Real is good for long, mid and short-term rentals because of its versatile lifestyle.

The average cost of property here in 2025 is similar to the price of apartments in Chiado, another upmarket, culturally diverse area within Lisbon. If you buy in Príncipe Real in 2025, you can expect to pay approximately €7,317,07 per square metre, and your apartment may fetch an annual yield of between 3% and 3.5%.

 

Buy-to-let Alfama

• 3%-4% annual yield 
• €7,300 per square metre

Alfama is the oldest neighbourhood in Lisbon and also the most touristy. In the middle of its Moorish architecture and narrow alleys, it is possible to find numerous attractions. Old but renovated buildings can be found here.

It is not the best neighbourhood for families, with buildings with no elevator, and no garage. However, it is possible to rent out to younger singles or couples. Thanks to the high number of tourists, this neighbourhood is perfect for doing short-term rentals.

Given its central location, Alfama is fairly expensive, with properties costing €7,300 per square metre on average in 2025. If you rent out your property in Alfama, you can expect yields ranging from 3% to 4%, depending on its location and size.

 

Buy-to-let Graça

• 4.6% annual yield 
• €5,542 per square metre

Known for its breathtaking views, the Graça neighbourhood is a place with a local feeling, where its people maintain their traditional habits. Prices are a little bit lower than in the downtown neighbourhoods, but good returns are expected.

As properties in Graça average just €5,542 per square metre in 2025 and yields of more than 4.5% can be expected, this is perhaps the best area to begin your search for a buy-to-let property in Lisbon this year, even if it’s not the most central location of those introduced on this list. 

 

Buy-to-let Estrela

• 5% annual yield 
• €7,337 per square metre

Although having a big cultural heritage and its famous Basílica, Estrela is mainly a residential neighbourhood. Here you can find a quiet slow living, for that reason the location is preferred by families. Estrela is ideal for long-term leases.

While property prices continue to creep up in this neighbourhood, it’s still worth investing here. After all, with a typical annual yield of around 5% expected, it’s one of the best spots in the city to secure a long-term buy-to-let investment opportunity.

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2. Is buying real estate in Lisbon a good investment?

Yes. Lisbon continues to offer high demand, low supply and strong long term value. Even though yields differ by neighbourhood, investors who choose areas with the best rental yields in Lisbon benefit from consistent occupancy and stable appreciation.