Top 5 Holiday Rental Regions in Portugal to Invest In
Discover the top 5 regions in Portugal to invest in a holiday rental property
April 2025
Investment in holiday rentals in Portugal has been increasing, following the growing interest amongst travellers in holiday destinations in Portugal. According to the National Institute of Statistics (INE), in 2023, Portugal recorded more than 10.7 million stays in temporary accommodation across the country, from January to November – a figure that marks a historical high for the sector.
Although not all holiday destinations in Portugal have the same demand, the fact remains that the country is one of the top 5 in the world where foreigners buy the most second homes for holidays, demonstrating how national characteristics generate international interest. In fact, the work of websites like Holidu are also helping to broaden this interest, allowing many tourists to discover the variety of available options and choose local accommodation during their stay.
In this article, we will look at the world of holiday rentals, highlighting the advantages of investing in the sector and showcasing the regions and cities of Portugal that make up the top 5 holiday rental destinations.
Why invest in a holiday rental in Portugal?
According to the Portuguese Secretary of State for Tourism, Portuguese tourism is expected to grow by 9% in 2025. This signals the future potential for growing tourism revenues in Portugal.
Being a country rich in built heritage, natural beauty, tradition, and culture, Portugal stands out in several niches, including various types of themed tourism, such as:
- Coastal tourism
- Cultural tourism
- Gastronomic and wine tourism
- Sports tourism (highlighting golf and surfing)
- Gaming tourism (casino)
- Religious tourism
- Ecotourism and rural tourism
- Adventure tourism
The vast range of holiday options is what attracts various types of tourists to Portugal, making it stand out on the international stage and making investment in the holiday rental markets in several national regions profitable, as we will highlight next.
The five best holiday destinations in Portugal to own a holiday rental
Although globally Portugal is considered a country where investing in holiday rentals is worthwhile, there are regional markets that stand out. Today, we present the best holiday destinations in Portugal, where the demand for temporary accommodation has a huge impact on the regional economy and where real estate investment is most profitable for owners.
1. The Algarve
The Algarve region has a particular focus on holiday homes along the Costa Vicentina, the coastal strip between Odeceixe and Burgau. However, the region also has holiday homes throughout southern Portugal. The Algarve is thus a highly sought-after destination for beach tourism, ecotourism, and gastronomic tourism.
It is estimated that the Algarve receives around 7 million tourists annually, making it one of the most popular holiday destinations for both national and international travellers choosing Portugal. Therefore, a holiday home in the Algarve can be a good investment for those looking to monetise their property.
2. Lisbon
The Portuguese capital, Lisbon, attracts around 4.5 million visitors annually, making it a hub for cultural, gastronomic, and gaming tourism. Additionally, Lisbon hosts numerous corporate events, attracting many tourists who combine attending these events with a holiday.
The immense demand for accommodation in the city is also justified by its proximity to other iconic points of interest, such as Cascais, Sintra, Almada, or Mafra. Thus, those interested in adventure tourism, ecotourism, gastronomic tourism, or even beach tourism find Lisbon a key location to stay during their visit.
3. Porto
In the north, Portugal’s second-largest city, Porto, is also an internationally recognised holiday destination, welcoming around 1.6 million tourists annually.
As one of the three cities served by an airport (along with Lisbon and Faro in the Algarve), Porto stands out for its accessibility, as well as its traditions, culture, and built heritage.
For wine tourism enthusiasts, the region is of great interest, as it is home to the famous Douro wines and Port wine, a sweet, fortified wine celebrated worldwide.
4. Portuguese Islands
The Azores and Madeira archipelagos are also key players in the holiday rental sector, attracting national and international tourists with their natural beauty, climate, traditions, and festivities.
Destinations like Terceira, Pico, São Miguel, and São Jorge are must-visits for anyone wishing to explore the Azorean territory. In Madeira, Porto Santo and Madeira Island are the most acclaimed, making them particularly appealing for those looking to invest in the holiday rental market.
5. Ericeira
Portugal is widely known as a beach destination, and for many, it is a true paradise for surfers. With an expansive and well-known coastline, the country offers numerous options for those seeking a beach holiday in Portugal.
Although many Portuguese beaches are inviting, for water sports enthusiasts, Ericeira stands out as the only European location classified as a World Surfing Reserve.
Anyone wishing to invest in a property catering to surfers in this region may find that this is a highly profitable form of holiday accommodation, placing guests in a location where culture, tradition, and sport go hand in hand.
Opportunities to invest in holiday accommodations in Portugal: What to consider
With a strong holiday rental market and immense growth potential, there is no doubt that investing in holiday homes can be very profitable.
Currently, both national and international trends highlight beach regions and ecotourism. Visitors often seek a combination of stays in comfortable, peaceful, and natural spaces, while being close to infrastructure, nightlife, and cultural events.
If you want to buy a holiday rental in Portugal and take advantage of lucrative opportunities, be sure to consider the best places to holiday in Portugal. Be sure to also opt for properties in safe and peaceful locations, but close to restaurants, beaches, and major landmarks.
Now that you know the best places to invest in the holiday rental market in Portugal, you can plan your property accordingly. To reach a wider audience, you can rely on websites like Holidu, which will help introduce your property to people wanting to travel to your property’s respective country.