Top 5 Lisbon Neighborhoods for the Best Rental Yields in 2025

Lisbon is attracting more and more real estate investors thanks to its pleasant climate, dynamic economy, and strong rental demand—both tourist and residential. Rents have surged by +26% in one year, reaching an average of €20.9/m² by the end of 2023. At the same time, purchase prices continue to rise (+5.1% year-on-year at the start of 2025), with an average of around €5,650/m² for a Lisbon property. In this context, focusing on older properties in need of renovation in the right districts can still offer attractive rental yields despite rising prices. On average, a rental investment in Lisbon generates around 4–5% gross yield, but certain neighborhoods significantly exceed this average.

Below, we present the Top 5 Lisbon neighborhoods offering the best rental yields on older properties. For each district, we provide updated purchase prices, typical rental yields by rental type (short, mid, long-term), and the area’s key advantages (accessibility, market dynamics, tenant profiles). Note: this analysis focuses on renovated older properties only; new-build developments are excluded.

1. Ajuda – Historic district in renewal near Belém

• Average purchase price: ~€5,480/m² (early 2025), up +13.7% year-on-year, yet still below the Lisbon average. A traditionally working-class area on the hills of Belém, Ajuda remains relatively affordable.

• Short-term rentals: Close to major tourist sites (Belém Tower, Jerónimos Monastery, Ajuda Palace). While less in demand than Baixa, well-located and optimized listings can achieve ~6–7% gross yield. Crucially, Ajuda is not (yet) subject to Lisbon’s strict Alojamento Local restrictions, making short-term rental licenses easier to obtain. Average Airbnb in Lisbon: 82% occupancy, ~€105/night. Ajuda may sit slightly below, but lower purchase costs boost profitability.

• Mid-term rentals: A strong strategy here. Home to several university campuses (veterinary, architecture, agronomy), Ajuda is ideal for students and young professionals staying 6–12 months. Coliving houses or furnished rooms yield high returns. Example: a 9-bedroom renovated house = €3,600/month (~7% gross) by renting at ~€400/room. Stable demand, reduced vacancy, and lighter regulation vs Airbnb.

• Long-term rentals: A traditional family neighborhood with high demand and low supply. Average rents: €20.4/m² (end 2023, +25% YoY) → ~4.5% gross yield on purchase. A 50m² T2 (~€270k) can rent for ~€1,000/month. Local charm, parks, schools, and good transport links make Ajuda a gentrifying, high-upside district.

2. Beato – Lisbon’s creative and emerging east

• Average purchase price: ~€5,180/m² (Jan 2025), slightly down (-2% YoY), showing an early-stage market. Historically industrial, Beato is cheaper than central Lisbon and offers strong appreciation potential.

• Short-term rentals: Not a mainstream tourist area yet, but the Beato Creative Hub, galleries, and cafés attract alternative visitors. Lofts/design apartments do well with niche travelers. Yields ~5–6% possible. Airbnb rules here remain lighter than in historic core, allowing easier AL licensing.

• Mid-term rentals: The biggest opportunity. Digital nomads, startups, creatives drive strong demand for 3–12 month furnished rentals. Mid-term rents can be nearly double long-term leases. Example: a €200k T2 can rent €1,100–1,200/month mid-term vs ~€800 long-term → ~6–7% gross. Growing appeal reinforced by future Factory Lisbon campus and design schools.

• Long-term rentals: Rents at ~€18.2/m² (end 2023) → ~4.2% gross yield. Traditionally working-class, now revitalizing with street art, breweries, converted warehouses. Demand is stable, appreciation likely (+23% in Marvila/Beato in 2024). Few new-builds means renovated old stock faces little competition.

3. Penha de França – Central, affordable, high-yield

• Average purchase price: ~€4,740/m² (early 2025), among the lowest within city limits. Still affordable vs neighbors like Arroios (€5,900/m²).

• Short-term rentals: Not a core tourist zone but adjacent to Graça/Alfama. Some appeal for authentic stays (miradouros, views). New AL licenses restricted nearby (São Vicente). Max yields ~6–7% with strong occupancy. Example: a €230k 50m² T2 rented 200 nights @€60–70/night = ~€12k/year (~5% yield).

• Mid-term rentals: Very strong segment. Near Instituto Superior Técnico & hospitals, plus lower rents than central Lisbon, attracts students, expats, interns, remote workers. A renovated 70m² 3-bed (€300k) could rent €1,500/month mid-term (coliving) vs ~€1,100 long-term → yields >6%. Authentic, safe neighborhood with strong demand.

• Long-term rentals: One of Lisbon’s most profitable annual rental zones. Rents hit €20.1/m² (+30.8% YoY) → yields >5%. A €200k T2 rents €800–900/month. Diverse tenant base: families, young professionals, expats. Central location, good transport, and many older buildings with renovation upside. A prime balance between affordability and centrality.

  
  

4. Carnide – Student and residential hub in the north

• Average purchase price: ~€5,080/m² (early 2025), stable (-2.6% YoY).

• Short-term rentals: Minimal tourist demand; Airbnb not attractive here.

• Mid-term rentals: Strong student market (near Universidade Europeia, Católica, and Lisbon’s main campus). Coliving/student rooms perform well: €350–450/room/month. Large houses divided into studios/rooms can yield 6–7%. Excellent metro links (blue line terminus), shopping malls, lively but safe environment.

• Long-term rentals: Traditional residential village feel with mixed population. Rents ~€16–17/m² → ~4% gross. Furnished long-term can push yields slightly higher. Stable occupancy, low vacancy risk. Good accessibility (metro + highways). Popular with both families and students.

5. Santa Maria Maior – Lisbon’s historic core (Baixa/Alfama)

• Average purchase price: ~€7,045/m² (Jan 2025), among Lisbon’s highest.

• Short-term rentals: Historically Lisbon’s Airbnb hotspot. Average Lisbon Airbnb: ~€30k/year, 82% occupancy; here, well-rated T2s can hit €40k/year (~10% gross). BUT: AL licenses are frozen, no new permits issued, some may not be renewed. Only properties with existing transferable licenses are viable.

• Mid-term rentals: Booming alternative due to AL restrictions. Attracts expats, digital nomads, professionals seeking 3–12 month stays. A charming T1 rents €1,600/month mid-term vs €1,100/yearly lease → 6–7% yields possible. Platforms like Flatio/Uniplaces facilitate demand.

• Long-term rentals: Among Portugal’s highest (~€26/m²), but high purchase cost keeps yields ~4–4.5%. Example: €420k 60m² T2 rents €1,500/month (~4.3%). Benefits: virtually zero vacancy risk, strong capital appreciation, prestigious address. Many renovated historic buildings offer modern comfort with classic charm.

Renovating Older Properties – A Winning Strategy

Lisbon’s top yields often come from older stock in emerging neighborhoods. With renovation costs €500–1,500/m², value creation is significant.

• Capital gains: Well-managed projects can generate +30–40% appreciation. Example: buy €200k + €50k renovation = post-renovation value €350k.

• Rental upside: Renovated studios rent €1,000–1,500/month depending on location.

• Tax incentives: In ARU urban renewal zones, investors may access reduced VAT and temporary property tax exemptions.

• Case study: Investor bought 2 micro-apartments in Algarve (€300k), rented €2,000/month post-renovation → 7% net yield + 15% appreciation in 2 years.

Caution: Renovations require structural checks, permits in protected zones, and reliable local contractors. Yet many foreign investors succeed, combining Portuguese craftsmanship (tiles, stone, carpentry) with modern upgrades.

Comparative Overview : Yields by District

Conclusion

Lisbon remains one of Europe’s most attractive rental markets in 2025.

• Ajuda, Beato, Penha de França, Carnide, and Santa Maria Maior each offer 5%+ yields on renovated old stock, with mid-term rentals (students, expats, digital nomads) often outperforming traditional leases.

• Renovation unlocks rental premiums, capital appreciation, and tax advantages.

• Rising rents (+12% forecast for smaller units 2024–2025) and structural demand ensure robust performance.

Investing in Lisbon’s older properties in the right neighborhoods offers a blend of strong cashflow and long-term value growth in one of Europe’s most dynamic capitals.

Invest with Confidence – Guided by Airnest REIM

Lisbon offers excellent opportunities in 2025, but choosing the right property, understanding local rules, and securing strong rental income requires expertise. That’s where Airnest REIM comes in.

• We assist investors from A to Z — from property sourcing and due diligence to purchase, renovation, and rental setup.

• Mid-term rentals (30–90 days) targeting digital nomads or corporate tenants — no AL licence required

• Alternative short-term solutions using specific legal frameworks or exemptions, depending on the property and zoning

With Airnest REIM, you don’t just buy a property — you invest with the confidence of having a partner who ensures profitability, security, and long-term value growth.

Contact us today to discuss how we can guide your Lisbon investment from purchase to performance.