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Family of 4. Algarve ...accommodations and "home base"?

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Family of 4 with 2 kids 11 and 14. Spending all of july in spain and portugal with time in Barcelona ,Madrid and the algarve. We will be landing in Lisbon July 8th and renting a car to get to the algarve and will have the car our whole time there.. We have to be back in Lisbon on the 21st to fly to Madrid. (Incredible cheap fare...51 dollars each tax included).

So my question is where in the algarve? If we had no kids I would be looking to stay in an old town..."up 3 flights of stairs" on a quiet little street.

Not the case though. My kids love walking and taking in the culture and exploring but they will want to get back to a pool and beach.

In a perfect world I would want an apartment with kitchen in a development that had a pool and was also walking distance to a beach. Also within wailing distance to an "old town" (20 mins walking) is lagos the most fitting? Although we will have a car I still would like to be within walking distance of a town and beach yet have a pool. Money is not a factor within reason.

(We will actually get back to Lisbon on or around the 18th to spend some time there)

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