In the UK the market is referred to as HMO (House of Multiple Occupancy)
You can either target students or workers visiting the area, either way they do not usually stay beyond 1 year. The yields are higher on paper but it is usually not recommended for passive investors since as Patirou says you have more turnover and repairs. You need to be on standby to visit the property regularly and sort out issues with rent arrears, evictions, disputes between renters etc.
Indeed, that will be my focus (Porto).
Because of the low available inventory, it is customary for the renters to pay for the whole year in order to keep their rooms for the following year/semester.
The main target will be uni students+young professionals who just need a place to sleep.
I have a management company which will manage all repairs, late night calls AND contract management for 8% fee of total rents (1 month rent per year).
If this works well, after 4-5 apartments itâs worth it to create my own management company and employ a full time employee to do this management.
It wonât be 100% passive but with the management company I am assuming 90% passive. I will keep you guys updated
Where do you get 90% leverage on those short-term rented properties?
In Portugal you can get up to 90% finance on property, it will depend on a number of factors.
From working with a credit intermediary, I got 3 proposals from differents bank offering 90% finance (fixed, mixed and variable rates).
But not all banks are willing to do this 90% financing, especially since I am not currently living in Portugal.
Although, making 15x the average monthly wage seems to open a lot of doors and financing options
Exactly, i managed to get the property for 187k instead of 217k. The purchase price is about 2/3 of your real estate investment, so for now iâm more than happy. Iâll let you know after 5 years if itâs still the case 
Regarding vacancies, the building is well located, in the middle of the city and there is a waiting list for renters, every year the renter as to say if he wants to stay or not.
I wouldnât touch Portugal for karma reasons 
Everyone hates you for âruiningâ the market together with othersâŠ
I am portuguese so I hopefully get a pass!
what are you referring to?
People are being priced out in some places, sometimes because of investment in short term rentals.
(esp. in more touristy places)
Though didnât most large European city now regulate things like AirBnB so that they now limit the amount of apartments dedicated to short term rentals?
They are doing it. Unfortunately I would say: I find it a limitation to the right of anybody to do what they please with their private properties.
I wonder why hotels are never blamed for the lack of affordable long-term rentalsâŠ
Short term rental are transforming long term location flat for travelers. So you are removing potential flat for local tenants.
HĂŽtel are not. It is dedicated building for travelers.
I remember the English buying up hoilday cottages in Wales. The Welsh, (allegedly), burning them to the ground (maybe still the case, not sure).
Thereâs zoning regulation in most places. You normally canât just build a hotel or transform a building into a hotel. Those regulation usually have very specific goal to try to make cities livable long term (mixed usage, green space, public transportation, etc.). (but letâs not debate that, that will quickly degenerate )
did you ever do this? I looked into something similar but more AirBnB style but the Alojamento Local rules are really trickyâŠ
If weâre truly going down that libertarian rabbit hole, Iâd demand that private ownership of land should be abolished.
Youâd rather rent or lease every piece of land you want to build upon from the government - at the governmentâs (fair and socially benevolent) terms and conditions.
Why should you or anybody own land rafter all? Land ownership is merely a title or right bestowed upon you by government. Thereâs no natural law or right to own land. Itâs not as if you invented, built, made or created it.
And any occupation of land deprives me of my freedom to walk on said land and enjoy its fruits.
Well if we want to enter that rabbit hole then also the concept of âgovernmentâ is a construct of our society 
Do you pay property taxes�
I will start this year when I find the right property.
I want to avoid Alojamento Local because of the ever changing regulations.
Plus, by renting by the room, students/young professionals are actually able to get a room for the semester.
does it mean renting room by room for long duration is not considering AL?
Nah, letâs not go into that rabbit hole, sorry for bringing it up in the first place.
But Iâd like to point out the Swedish system where you do own land like most everywhere, but you canât deny others the right to enter, camp, pick berries/fruits in your land. I find that a good compromise, but maybe it works only because of the low density of the population in the north.