Living La Vida Lagos: How Much Does It REALLY Cost To Live In Lagos, Portugal?

Unless you’re reading our blog for the very first time, you’ll know that we’re delighted with our adopted country of Portugal and especially, the Algarve Region where we’ve been for the last two years, busily putting down some shallow roots. For us, it’s turned out to be an excellent place to live and we love exploring the area as well as playing impromptu tour guides, sharing favorite places with friends passing through. And maybe that’s why it really bothered us when we read an article about the cost of living in the Algarve that specifically mentioned outrageously low prices in Lagos (hamburgers costing €3) and promised that a couple could live on a budget of €1300 a month, more (that would be us) or even less.

But let’s back up a moment to confess that just a few short years ago, back in 2011 and right at the beginning of the germ of an idea that would lead to where we’re living now, I loved to check out the online stories about expats living out their retirement dreams in exotic locations overseas. We’d pass by the pics of palm trees and charming colonial cities and zero right in on our big question: What would it cost to live there? What would paying a rent of $700, $800 or even $1000 per month get us and what could we expect our groceries to cost each month? What was the price of a typical restaurant meal? A taxi? And, could we afford to pay the monthly air conditioning bill?

 

 

This is where traveling slow and living like locals as we made our way around and through several countries came in useful. From the beginning of our travels, we’ve kept detailed expense records of our daily costs and could tell you in a few minutes what we spent in each country. Having an idea what a realistic cost of living would be for us as well as what we could and couldn’t live without was extremely useful so that we could make some well-informed decisions based upon our practical knowledge. We visited many places where expats had written glowingly of their experiences and found, kind of like the nursery tale of Goldilocks and the Three Bears, that many places were too hot or too humid, some of the ‘springtime temps’ were too cold, some too rural and yes, some too expensive. Many places had little to offer in the way of things to do, some were too grimy, downright ugly or the air was polluted with diesel fumes, burning garbage and dust. In some places we had to be especially vigilant about protecting our possessions (we learned our lesson the hard way when a computer and camera were stolen in Ecuador) and there were places we didn’t feel safe. Lastly, some lacked medical services that we want in place as we age. Perhaps one of our most unanticipated lessons that we learned, on a memorable month-long visit to Big Corn Island off the coast of Nicaragua, was that our vision of paradise on a tropical island fell far short of the nirvana we’d imagined.

While we know that cost of living is an important consideration when you’re thinking of moving overseas, there are a lot of other things to think through, too. We’re mindful of our spending but bare bones living isn’t how we want to live. We want to download the new best seller onto our Kindles, watch Netflix, buy a pair of shoes or something for our apartment and go out to eat with friends without counting the pennies. And, contrary to what an online article we read said, €1300 ($1530 USD) a month probably won’t be enough to live in most places in the Algarve. (But, for those on a budget, don’t let us discourage you because there are some great places to check out north of us and along the Silver Coast which are less expensive.)

We compiled our expenses from July through November this year and then averaged our monthly costs to give you a better idea of what we spend each month living in Lagos.

 

 

RENT – €800/$939 USD

Rentals are difficult to find in Lagos so we were beyond happy when we found a fully furnished, modern, two-bedroom, two-bath apartment on the outskirts of Lagos. The apartment is a 5-minute walk to the beach and a 30-minute walk to the heart of historic Lagos. It has a large kitchen with granite countertops, a dishwasher and washing machine, a balcony with a sea view and access to a rooftop terrace. There’s a communal pool, a storage room and an underground parking space as well as plenty of secure parking behind a gate. (Note: Our lease ends in April and we’re hoping to find a house somewhere near Lagos so this figure will probably change.)

 

 

GROCERIES – €365/$430

We both like to cook and we eat the majority of our meals at home. We buy very little processed or ready-to-heat foods and eat a lot of fruits and vegetables, fish, chicken and lean hamburger. We usually slow cook pork and beef cuts as we’ve found them to be tough.

HOUSEHOLD – €160/$189

This includes all the miscellaneous non-grocery items that usually get lumped in with the grocery bill like cleaning products and laundry soap, toiletries (shampoo, toothpaste), paper towels and toilet paper. It also covers household items such as a printer stand, pens and pencils, garbage bags, plastic storage bins and kitchen towels.

UTILITIES –  €215/$253

We’ve lumped in three separate costs under utilities. Our PHONE/CABLE TELEVISION/INTERNET is bundled at €60/$69 for a landline, one mobile phone and basic cable. Our WATER bill recently increased and runs about €25/$29 and our ANNUAL ELECTRICITY averages out to €130/$153 per month. We changed our average cost from monthly to annual for our electricity bill to give you a better idea of what we’re paying for an average. From December through March, we heat the living room of our apartment and from May through October, we cool the apartment using fans and the old-fashioned method of opening our windows during the night rather than using the included A/C in the living and bedrooms. Sewer and garbage is included in our rent.

TRANSPORTATION – €170/$200

We bought a 2012, 4-door Skoda our first winter here for €7500/$8830 which has a manual transmission. Following a tip from a friend, we found a mechanic who charges us local prices rather than the higher prices we’d been paying at a far more conveniently placed auto shop. Gas in Portugal is outrageous no matter how you look at it. We pay roughly €1.50/$1.77 per liter or a heart-stopping €6/$7.06 per gallon. A set of four new tires and an alignment cost us €279/$329 which is included in our monthly average. Also included in this average is our monthly car insurance at €28/$33 and the road tax (similar to license place fees) which is €13/$15.

 

 

MEALS OUT – €138/$162

Meeting friends for a late lunch is one of our favorite things to do here in Lagos and there are plenty of restaurants and cafes in the area to while away an afternoon. An average meal for the two of us costs €25-40/$30-47 including a drink and small tip. For wine drinkers it can be a real bargain because sometimes a bottle of water costs more than a glass of wine!

 

 

CLOTHING – €99/$117

HEALTH INSURANCE – €92/$108 for both of us

We carry a Portuguese private insurance for which we pay an additional copay per doctor or dentist visit. As residents, we also qualify for the public healthcare, the Portuguese Serviço Nacional de Saúde (SNS) which charges a very small copay. We did not include our medical costs or prescriptions as figures can vary greatly from person to person.

LANGUAGE LESSONS/GYM – €107/$126

ONLINE PURCHASES – €113/$133

This includes Netflix, movie rentals and book purchases from Amazon for our E-readers

MISCELLANEOUS – €102/$121

This includes all sorts of incidentals like haircuts and random purchases that don’t fit into any other category.

THE GRAND TOTAL – €2361/$2780

For us, “Livin’ La Vida Loca” in Lagos, Portugal doesn’t get much better.  We have everything we need at our fingertips but, more importantly, we have (just about!) everything we want. And …WE’RE LIVING IN  FREAKING EUROPE!  Obviously, our priorities and expenses are going to be different from another couple’s spending but there’s no reason to exaggerate about how affordable the Algarve Region of Portugal is. (And articles saying that a couple can live here comfortably for €1300/month only set people up for failure.) There are always going to be less expensive places to live around the world but, for a country brimming over with history, culture, stunning landscapes, beautiful beaches, a mild climate, great food, good medical care and friendly people – we figure we probably don’t need to find a better place for us than right where we are!

By Anita Oliver and Richard Nash

Note:  We’re going to take some time away from writing for the next few weeks, so this will be our last post for 2017. Wishing you all a very happy holiday season and we’ll catch up with you sometime in January.

 

155 comments

  • You mention that you bought a car. I was hoping to ask a few questions about owning a car in Portugal (I am hoping these weren’t already answered and I missed them):

    1) Do you have to get your car inspected each year? How much does that cost?
    2) What about registration? Every year? Every two years? What is the cost?
    3) Did you simply convert your U.S. driver’s license to a Portuguese driver’s license? Did you have to take any tests (written, road, etc.) or was it just a straight conversion?
    4) How are the DMVs over there? As hectic as in the U.S.?
    5) Europe is known for cameras everywhere and nabbing you for offenses and charging high fines. Is this the case in Portugal, too?
    6) Any other specifics with owning a car that you can speak about that you think would be helpful to potential expats?

    I don’t think living without a car is within my tolerance level. I like walking and am healthy, etc. but I am used to having a car. I wouldn’t get anything brand new or expensive. Maybe go the route you did but perhaps get a Toyota instead since I don’t know the Skoda reputation. While I doubt I would drive it everywhere like I do here in the states (because everything is so spread out in America), I can see me going for road trips to different places. Or just take a run to the city center (I would want to live in a more quiet location) for groceries, cafes, restaurants, etc.

    I am not quite sure Algarve is for me but I will visit. Perhaps too busy and too touristy. Maybe not the Lisboa area either. Aveiro and Leiria seem interesting. I have visited Porto, Tomar, Batalha, Coimbra, Obidos, Lisboa, Cascais and Estoril. I think I would prefer to be near the ocean for the cool breezes.

    -Gary

    Liked by 1 person

    • Hi Gary. Lots of good questions! Cars older than 4 years need a road inspection either every year or every other year at a not-so-bad cost of €37. The license plates come with the car and a road tax is paid annually at the Finanças office. Our cost was about €120. Regarding the driver’s license: You can exchange your US driver’s license for a Portuguese license within 90 days after receiving your first one-year resident visa from the SEF. The process can take some time but it’s relatively straightforward. If you make the mistake like we did (we had a hard time wrapping our heads around surrendering our US license) you can still exchange your license but a driver’s test is also required. And so far, we’ve been lucky at avoiding any fines or traffic violations. 🙂 If you plan to live in the Algarve area or really, any small village, we’d definitely recommend buying a car. Having a car makes it so much easier to explore the beaches and rural areas of the country. You’ll have to let us know what you decide and, if you make it to our area, be sure to give us a shout out!

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  • I bet Portugal could even be done cheaper! I mean, you guys are living quite nicely by the sounds of it. Well done! Portugal is amazing!

    Liked by 1 person

    • There’s no arguing with your point – you can live here for much cheaper if you want! The most obvious way to save is to avoid the very popular areas like the Algarve and Lisbon and, perhaps, use public transportation. And it doesn’t hurt that a lot of our favorite pastimes and hobbies are either free or fairly inexpensive. However, compared to what we used to spend in the US, living here gives us a very good and comfortable lifestyle for a lot less. We have to agree with you – Portugal is amazing!

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  • We have been reading your blog with eager interest and are very grateful at your detailed posts on the how-tos of moving to and living in Portugal. One thing that we have been wondering, and haven’t discovered in our research, is what expats do if they become the frail elderly and need assisted living. We know how continuing care retirement communities work in the US, but can’t seem to find similar arrangements in Portugal. Have you given any thought to that or do you know of any arrangements that people have made? We have no children, so we have no one to call for help. We are most likely far from the time we might need it, but like to be prepared.

    Thanks for all your good info!

    Layne

    Liked by 1 person

    • Thanks for stopping by our blog Layne. We’re so glad that you’re enjoying it and finding our information useful. You’ve asked a very good question and we totally understand your concern about preparing for a future where you may need some assistance. Unfortunately, we can’t really answer your question at this time. I do know that there are hospice programs in place for terminal patients and that the private health care plan we carry (Medis) has some provisions for home health care. Other than that … I’m just not sure. While we’ve talked about the many “what ifs” about aging between ourselves and our friends here in Portugal, we have yet to put a plan in place. We’ll have to do some asking around and see if we can’t find out some options. If we do find some answers, I’ll make sure to put a note on our FAQ’s page.

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  • What a great post. We have visited many years ago Lagos and many other places in Portugal. Our favorite place is Madeira. It is beautiful, there are possibilities to make nice hikes, nature is incredible beautiful. If You have to go there, then visit it.

    Happy weekend.

    Liked by 1 person

    • Thank you! As you can tell, we love Portugal and have been really happy here in Lagos. Interestingly enough, Funchal, Madeira, was our very first stop in Portugal and I can understand why you’d recommend it as it is beautiful indeed. We hope to get back sometime and spend a few days exploring it as our visit there, a day stop on a cruise ship, was much too brief.

      Liked by 1 person

  • Hi Richard & Anita,

    We will be visiting Lagos this September, 2018. We will also be scouting out the rest of the Algarve, namely; Faro, Tavira & Vila Real San Antonio. We’re a couple in our late 50’s, considering retiring to the Algave in 2019. We would love to chat with you over coffee. Please let us know if you’re available to meet. We will be in Lagos From Thursday September the 27th through Sunday September, 30th.

    Kind Regards,
    Elizabeth

    Liked by 1 person

    • Hello Elizabeth. Thank you for your comment and please accept our apologies for our very tardy response. 🙁 It may be a bit premature but we’d love to say “congratulations!” to you and your husband regarding your upcoming retirement and your future plans to become expats and residents of Portugal. The planning and anticipation of changing the whole direction of your life as well as taking up a totally different lifestyle makes this a time filled with (just a little?) stress about the unknown but a lot of excitement and anticipation, too. We remember how we felt when we were preparing to make the leap – a lot of work and details to attend to but so much fun! And it sounds like you’ve done plenty of research already since you have some destinations in mind. You’ll find your boots-on-the ground scouting trip especially helpful and September is a good time for a visit as the weather is still gorgeous, the tourists are starting to leave and finding some affordable accommodations is possible. Regarding a meeting in September, as far as I know now, our schedule’s pretty open and we always look forward to meeting new people. I’ll send you an email link so that we can hopefully coordinate our schedules and meet. Wishing you the best of luck while you plan out your future retirement here in Portugal!

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  • Sorry we are late to the party, we just read about your blog on ChooseFI Expats. I have been trying to convince my wife we can retire now and I would love to check out Lagos as a place to retire. Thanks for the detailed description of your costs for living in Lagos. We traveled to Lisbon and loved the people and the nearby beaches. I will show her your post tonight. I look forward to checking out the rest of the blog!

    Liked by 1 person

    • Hi Glenn! We’re so glad you found our blog and took the time to comment. It sounds like you’ve fallen in love with Portugal like we did and are doing the legwork now to decide about retiring here. It’s been a great choice for us and we absolutely love living in the Algarve. Lagos is a popular place for many expats and retirees, especially with its lively historic area. Something to keep in mind while you’re considering Lagos, especially if you’re thinking of renting an apartment, is that it might be best to add some of the other lovely cities up and down the coast (Carvoeira, Loule, Tavira, etc.) and consider them as well.The word on the Algarve is out and there’s a lot of competition for long term leases so its best to cast your net wide. That said, living here is well worth the effort!

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      • Thanks so much for the response. We would be open to looking around at some of the other beach towns along the coast. We would like a place where we could walk to the beach and the a downtown area that had a food market. Would you know the approximate cost of purchasing a place similar to what you are renting? I was thinking of purchasing a place as an alternative and then renting it out when we are traveling.

        Liked by 1 person

        • Many people in the Algarve do exactly what you’re thinking of – that is, purchasing an apartment or condo for their visits and renting it out when they are gone. Google ‘property managers in the Algarve’ and you’ll see page after page of listings. Your idea might be even more practical at this time because the long term rental market is very tight and Portugal has received record-breaking numbers of visitors in recent years. Depending on location, prices of course are going to vary, but the owners of our apartment in Lagos recently put it on the market (an event we hadn’t foreseen 🙁) and are asking somewhere in the neighborhood of €250K. Depending where you live in the US, that figure might have you grinning widely or gulping! Building is going on at a frenetic pace up and down the Algarve now because of the tourist boom, so we’re guessing that there’s a good-size inventory of places for sale and some bargains to be found, as well as places in need of renovation if you want to go that route.

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    • Hi Guys
      Any off the cuff thoughts on the Golden Residence Programme? Looks like some form of investment in real estate or business capital might get you a permanent residence.
      I didn’t know if you had spotted any non-obvious pluses or minuses to this?
      Take care
      Martin.

      Liked by 1 person

      • Hi Martin. Great question! 🙂 We are familiar with Portugal’s Golden Visa and it’s a viable program requiring a substantial investment for some expats who want a fast-track way to permanent residency. Having owned 9 homes over the course of our marriage and going through a radical downsizing in 2012 which reduced our possessions to what we could carry while we traveled full-time, we’ve decided that the idea of home ownership is not for us at this point. We much prefer the flexibility of renting. One of the things that makes Portugal such a good choice for us (and for many other expats from the US and Canada) is that it’s relatively easy to get a residency visa without spending a lot of money although obtaining permanent residency can take a few more years.

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        • Hi Anita. Wonderful, informative blog! Thanks for all the info. We’re an American couple who are new residents of Portugal and moved to Porto in September. We found this winter this far north too cold and rainy and were wondering if we’d have more luck in Lagos next winter – December through February. Our apartment in Porto doesn’t have heat and faces east so sometimes the space heaters just didn’t do the job. We’re interested in spending our time taking Portuguese lessons during those months, and we don’t want to feel isolated in a beach town. One other question, is it very windy in the Lagos in the winter? If you escape the area in winter and you found a good winter getaway please let me know where!

          Liked by 1 person

          • Hi Therese, thank you for your kind words and welcome to Portugal! We understand why Porto really wows so many people but, as you said, the colder winters are the price. This winter, December and January were lovely in Lagos and most of the Algarve: sunny, blue skies and sweater weather. However, February and March were abnormally rainy and, in comparison to the two winters we’ve gone through previously, seemed colder. Fortunately, most of the newer apartments for rent have wall units that provide heat in the winter and A/C during the summer but definitely check to make sure. We’d also recommend asking your landlord to provide a dehumidifier to keep the moisture down in the apartment (we run ours from Dec. to March) which will help make you feel warmer and prevent mold on the interior walls. Lagos has some wind but, except for a few gusty days, we’ve never felt like it’s been a problem. We understand your concerns about landing in a deserted beach town during the winter so Lagos is a good choice. Other good choices with round-the-year services are Albufeira in the central Algarve Region (we’ve recently moved from Lagos to Albufeira which is why our blog has been neglected for a while) and Tavira in the eastern area. There are language schools in all 3 cities and, if you’d like we can give you personal recommendations for both Lagos and Albufeira. Good luck and, when you make it our way to check things out, let us know and maybe we can meet up for coffee!

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