Investing in property in the Algarve, specifically in Lagos, Portugal, offers tremendous opportunities for strong returns. As a business that directly connects property owners with holidaymakers, we have firsthand insights into what makes Lagos a prime location for rental properties. But maximising ROI requires more than just owning a property in a sought-after location; it’s about making strategic decisions and focusing on the factors that drive profitability.

1. Understand the Lagos Property Market

The property market in Lagos is consistently strong, with a growing interest in holiday rentals. The Algarve holiday rentalmarket, including Lagos, is expected to grow by 3.39% per year from 2024 to 2029 (Statista). This trend indicates strong demand for short-term rental properties and Lagos is no exception.

The area's appeal, especially with its proximity to the beach and rich cultural heritage, continues to attract international tourists. In July 2024, average hotel occupancy rates across the Algarve were 83.4% (Mercan), further illustrating the potential for strong returns on rental properties.

As an investor, it's essential to understand that prime areas like the Lagos city centre or along the coast will always attract high occupancy rates, making them ideal for rental properties. By targeting these prime spots, you can ensure consistent demand for your vacation rental.

2. Optimise for Peak Season

Lagos, like other parts of the Algarve, experiences its peak tourist season from June to September. During this time, demand for holiday rentals is at its highest and rates can increase significantly. Properties in prime locations near the beach or with views of the coastline see a considerable uptick in interest.

Our business has seen firsthand how adjusting rental prices during the high season can significantly impact ROI. We advise property owners to:

• Increase rates during peak demand: The market allows for higher prices during these months due to the influx of tourists, especially families and international visitors.
• Plan for off-season bookings: While the peak season offers great returns, off-peak months (from October to May) still present opportunities for steady occupancy if marketed correctly.

It’s also worth noting that tourists are increasingly seeking long-term rentals in Lagos during the quieter months, which can help sustain steady income and maximise ROI year-round.

3. Enhance Your Property’s Appeal

To stand out in the competitive Lagos holiday rental market, maintaining and upgrading your property is critical. Guests expect a comfortable, well-maintained home, and this is one area where investing in upgrades can pay off.

Here are key areas where property owners can make an impact:

• Modern amenities: With increasing demand for luxury and convenience, offering amenities such as high-speed internet, air conditioning, and updated kitchen and bathroom facilities can attract higher-paying guests.
• Location matters: Guests in Lagos are drawn to properties with easy access to the beach, the historical centre or local attractions. Properties in these prime locations are often booked months in advance.
• Interior design and comfort: Investing in stylish and comfortable furniture, quality linens, and even additional touches like a private terrace or garden can increase guest satisfaction and lead to positive reviews and repeat bookings.

With an average property price of €2,733 per square meter in the Algarve as of December 2024 (Immigrant Invest), the investment required to elevate your property in Lagos can offer impressive returns if done strategically.

4. Leverage Professional Management Services

Managing a vacation rental requires considerable time and effort, especially when aiming for high occupancy rates and ensuring the property is always guest-ready. Working with professional property management companies in Lagos can make all the difference in your ROI.

We work closely with local property managers who can help you:

• Maximise visibility: Experienced property managers ensure that your rental is listed on an easy-to-use site, well visible in Google rankings. 
• Implement dynamic pricing: A good property manager adjusts pricing according to market trends, helping you capture optimal rates based on demand.
• Ensure quality service: Professional management ensures that your property is cleaned and maintained to the highest standards and guest communications are handled swiftly and effectively.

Utilising these services allows property owners to benefit from consistent, hands-off income while ensuring their property remains attractive and competitive in Lagos’s busy rental market.

Conclusion

Maximising ROI on a vacation rental property in Lagos requires a balanced approach that takes into account peak demand periods, property enhancements, professional management and a deep understanding of the local market. By focusing on these core strategies, property owners can take advantage of the strong tourism demand while ensuring their property remains competitive.

Our business is dedicated to helping owners in Lagos navigate the holiday rental market. If it's offering insights into pricing strategies, managing bookings, or providing recommendations for property improvements, we’re here to help you achieve the best return on your investment.

If you own a property in Lagos or are considering investing, we’d love to discuss how we can help you maximise your rental income. Contact us today to find out more about the potential of your property in the Lagos market.