Ever wondered why you should invest in Europe? If you’ve ever thought about gaining European residency through an investment, you’ve almost certainly come across two common pathways: buying property or subscribing to an eligible investment fund. In 2025, these two avenues stand in stark contrast, particularly as countries like Portugal tighten rules on real estate, pushing foreign capital toward non-property options. So, which route is right for you in the long run—owning a tangible asset or investing in a fund? Let’s take a look at the pros, cons, and critical insights to help you future-proof your investment in Europe.
The Shift Away from Real Estate
Over the past decade, real estate has been the go-to method for investors seeking residency in countries like Portugal, Spain, and Greece. However, political pressure and concerns about housing affordability led some governments to restrict or phase out property-based visas in prime locations. In Portugal—once the poster child for real estate–driven Golden Visas—residential property investments no longer qualify for new applicants. Meanwhile, Greece raised the minimum property purchase requirement to USD 530,600 in prime areas to curb speculation.
Bottom Line: The once-standard model of “buy a flat in a big city and get residency” is increasingly under scrutiny. Real estate is still an option in many places (e.g., parts of Greece, Spain), but its future depends on evolving local housing policies.
2. Pros and Cons of Real Estate Investment
Pros
- Tangible Asset
Real estate offers a physical property you can see, touch, and potentially enjoy as a holiday home. - Potential Capital Appreciation
If you buy in a high-demand area, you might profit from rising property values. - Rental Income
Letting out your property (long-term or short-term) can offset costs and generate passive income.
Cons
- Market Fluctuations
Property values can drop if local markets cool or if political changes deter foreign buyers. - Maintenance & Management
You’ll either need to manage the property yourself or hire a company—an extra layer of cost and complexity. - Policy Risks
As seen in Portugal, governments can ban or raise thresholds on real estate for foreign investors, putting your entire plan at risk if new rules come into effect mid-way.
Pros and Cons of Fund-Based Investment
Pros
- Ease & Convenience
Subscribing to an approved investment fund can be less hands-on than owning a property. Professional fund managers handle day-to-day operations. - Potential Portfolio Diversification
Some funds invest in diverse sectors—tech, renewable energy, infrastructure—providing exposure to multiple industries rather than a single asset. - Resilience to Housing Policy Shifts
Fund-based routes are often less politically sensitive than real estate, so they may remain open even if property rules tighten further.
Cons
- Less Control
You don’t personally manage what the fund invests in—this is both a benefit (professionals do the work) and a downside (no direct say in decisions). - Lock-In Periods
Many Golden Visa funds require that you remain invested for 5–7 years. Exiting early can lead to losing your residency or incurring penalties. - Due Diligence Complexity
You must thoroughly vet the fund’s track record, management team, and exit strategy—especially if it’s a newer or lesser-known entity.
Cost-Benefit Breakdown
| Factor | Real Estate | Fund Investment |
|---|---|---|
| Minimum Entry | USD 275,000 in parts of Greece
(USD 530,600 in prime areas), USD 530,600 in Spain |
USD 530,600 in Portugal funds,
USD 275,000–USD 530,600 in Hungary (new “strategic” funds) |
| Holding Period | Typically 5 years (varies by country) | Often 5–7 years, depending on the fund |
| Potential Returns | Possible rental yield + property appreciation | Varies by fund performance;
some funds target 3–7% annually |
| Day-to-Day Involvement | High (maintenance, rental management) | Low (fund managers do the heavy lifting) |
| Policy Stability | Medium (property routes are under scrutiny) | Potentially higher; funds are less prone to sudden policy changes |
| Risk Profile | Tied to local real estate market | Linked to portfolio type (real estate, tech, or other assets) |
Likelihood of Future Policy Changes
Portugal
After eliminating the real estate path, the main option is fund-based investments or cultural donations. This could remain stable as the government aims to channel foreign capital into business and research instead of housing.
Greece
Real estate is still thriving, but with increased minimums in popular regions. Fund and bond investments exist but remain less common—for now. They may gain traction if property-based visas tighten further.
Spain
Real estate remains a popular route with USD 530,600 minimum, but there have been discussions about scaling back the property angle. If that happens, expect a shift toward fund or business investments.
Hungary
The revived “guest investor visa” allows both property (above USD 530,600) and fund-based routes (as low as USD 275,000). Since it’s newly relaunched, policy changes are possible, but fund investments look to be central to the scheme’s future.
How to Decide Which Path Is Right for You
1. Assess Your Timeline
Real estate might offer capital gains over time, but if you anticipate fast policy shifts, a fund-based route could be more secure.
2. Gauge Your Risk Appetite
Are you comfortable with the volatility of a local housing market? Or does the potential for higher, diversified returns in an investment fund appeal to you?
3. Consider Your Level of Involvement
- If you like hands-on management—perhaps you’d enjoy owning a rental property.
- If you want a passive approach, a fund could save you a lot of logistics.
4. Think About Exit Strategies
- Real estate can be sold (hopefully at a profit) once you meet the minimum holding period.
- Funds often have a structured exit window; check for any penalties or complexities.
5. Stay Informed on Local Legislation
Rules can change fast. Work with reputable advisors who track these developments and can alert you if a better opportunity arises—or if policy shifts threaten your plan.
European Residency In 2025
In 2025, European residency by investment is no longer just about snapping up apartments in prime capitals. Governments are nudging—or outright steering—investors toward fund-based or alternative paths to shape their economies in more productive ways. Real estate still has plenty of upside, but new rules and higher thresholds signal the winds of change.
Choosing between real estate and fund-based investments ultimately depends on your risk tolerance, lifestyle ambitions, and financial goals. Some may appreciate a summer getaway they can rent out, while others want the convenience and diversification of a professionally managed fund.
Either way, do your homework. Whether you’re eyeing a chic flat in Athens or a cutting-edge VC fund in Lisbon, understanding the ins and outs of each route—and how future policy might affect it—will give you the best shot at a successful, future-proof European residency.
