25 reasons to buy a holiday property in Madeira
In the past, the island of Madeira was quite unjustifiably a little-noticed and therefore undervalued region for real estate investments. While the Portuguese mainland has been attracting attention for some time, especially through the Golden Visa programme for non-Europeans, Madeira was not in the spotlight until a few years ago due to less effective marketing. Now, however, the regional government is increasingly making up for this deficit and Madeira is gradually and understandably becoming the new hotspot for investors. The fact that this is becoming a lasting trend and that you can profit from this development is due to the following factors:
Stability
Portugal, and in particular the autonomous region of Madeira, is a politically stable country that is not known for terrorism and mafia structures. Madeira has its own government and parliament and is thus able to react quickly and unbureaucratically to regional changes and requirements.
Geostrategic position
Madeira is, together with the Azores and the Canary Islands, the westernmost region of Europe and is geostrategically favourably situated, far away from conflict hotspots in Eastern Europe.
Security
The island has no security problems or no-go areas. The crime rate is one of the lowest in Europe.
Accessibility
With a flight time of 4 to 5 hours, Madeira is quick and easy to reach from Germany. There are direct connections to Funchal from the airports in Frankfurt am Main, Hamburg, Cologne, Düsseldorf, Stuttgart, Berlin, Bremen, Leipzig, Hanover, Nuremberg, Erfurt, Friedrichshafen and Dresden, as well as from many international destinations.
Valuability
The island is characterised by a spectacular, steeply sloping coastal landscape. As a result, building plots with exceptional views of the Atlantic and the landscape have been developed. However, these plots cannot be multiplied at will. A restrictive approval practice to preserve the beauty of nature also limits the supply of plots. At the same time, this ensures that the value of the existing properties is maintained and they thus offer good protection against inflation.
Quality of Construction
The quality of construction can absolutely keep up with European and German standards. In the case of new buildings, the builder is legally obliged to provide a five-year guarantee.
Building costs
Building costs and property prices are quite affordable due to the low wage level. The average selling price in Madeira is less than half that of Mallorca, for example.
Yield
The possibility of short-term rentals to holidaymakers is excellent. A rental licence is easy and unbureaucratic to obtain. The rental income is taxable locally. A simplified tax system for annual income below 200,000 euros allows a tax rate of less than 10% on the income. A rental occupancy rate between 70% and 80% and a return on capital of 6% are feasible.
Maintenance costs
The maintenance costs for a property are extremely low. This applies both to public charges such as property tax and fees, as well as to maintenance and upkeep due to the lower wages compared to other European countries. Energy costs are also favourable in European comparison, as Madeira produces a lot of its own electricity. With 3000 hours of sunshine a year, the installation of a photovoltaic system or solar thermal system is particularly worthwhile, which is subsidised by the state in most cases.
Purchase costs
The incidental purchase costs for a property in Madeira are manageable and amount to approximately 7% to 8% of the purchase price. By law, the agent's fee is borne exclusively by the seller, unless you have explicitly given a search mandate to the agent.
Infrastructure
Thanks to European and domestic aid, Madeira has an extremely attractive infrastructure, which is often above German standards. The internet is considered one of the fastest in Europe. Transport routes are elaborate and well developed. All places can be reached quickly and easily by public transport. More than 50% of the energy supply will come from renewable resources in the near future.
Health care
Health care in Madeira is excellent. There are nine hospitals and private clinics in Funchal alone and two more in Ponta do Sol and Calheta. The standard is equivalent to that of German hospitals and at least English is spoken.
Nature conservation
The inhabitants take great care of their archipelago. They are proud of their island and the standard they have achieved. They preserve nature, landscape and cities to the best of their ability. Funchal is considered one of the cleanest cities in Europe.
Madeirans
The Madeirans are friendly, polite and helpful people. They treat guests and each other with equal respect. This is part of their attitude to life.
Climate
Few places have such a balanced climate as Madeira. It rarely gets uncomfortably hot in summer and not really cold in winter. Low energy consumption for heating and air conditioning are the result.
Year-round season
The climate allows for a year-round season. Even in winter, there are many holiday guests and holidaymakers who "winter" on the island. Holiday properties can be rented out all year round. There are no seasonal closures of gatronomies or hotels, as is common on the Balearic Islands, for example.
Way of Life
Life on Madeira is very relaxed. Even in Funchal, the capital, it is rarely hectic. The people of Madeira are relaxed, but without falling into a Mediterranean indifference. On the contrary, they are extremely reliable and hard-working. Working even at weekends is a matter of course on the island. Shops are open until 10 p.m. on weekdays and even on Saturdays, food markets and shopping centres even on Sundays.
Leisure
Madeira has countless leisure opportunities. There are three golf courses, two on Madeira and another on the neighbouring island of Porto Santo. Many water sports, such as diving, sailing, surfing and much more are offered at various locations on the island. But the island is above all a paradise for hikers. Mountain biking, canyoning and mountaineering are also popular sports on the island.
Beach holiday
Those who want to experience extended hikes on a nine-kilometre-long sandy beach or a holiday with Caribbean flair can take the ferry to the neighbouring island of Porto Santo. As a day trip or for a short break, this is another highlight for locals and holidaymakers alike. But Madeira also has very beautiful beaches that are not overcrowded even in good weather.
Eating
The restaurants on the island are excellent, the choice is varied. The food is fresh and of high quality due to the regional connection to agriculture and fishing. The service is good almost everywhere and there are also the extremely affordable prices, which are regularly only half as high as in Central Europe.
Cost of living
The cost of living in Madeira is lower than in many other European countries. Food is often produced locally, has a high degree of ripeness when harvested, short transport distances and therefore simply tastes better.
Holiday trend
Madeira is on holiday trend. The island won the "Tourism Oscar" World's Leading Island Destination for the sixth time in a row in 2021. Bookings are already so high in the current year that local tourism managers are hailing the best year in history. Currently, about 1.4 million tourists visit the island per year, most of them from European countries.
Work-Life-Balance
The island has a very distinct community of so-called "digital nomads" who have moved their jobs to Madeira due to increasing digitalisation. There is hardly a better location for a good work-life balance.
Flora and fauna
Madeira lives up to its name "flower island", especially in spring. Thanks to the year-round mild climate combined with short-term rainfall, an extremely lush plant world thrives. Many animal and plant species are endemic, i.e. only found here. A visit to the various botanical gardens is also recommended, with a concentrated exotic variety of flora and fauna. The unique Laurisilva - the laurel forest on Madeira - is even a UNESCO World Heritage Site and covers 20% of the island's surface area with 150 square kilometres.
Serenity
Madeira is not overcrowded, apart from a few tourist hotspots in Funchal in the summertime and when cruise ships arrive. Visitors are pleasantly distributed around the island. Beaches and restaurants are not overcrowded, there are no beach sales and tourist nonsense.