Investing in Montenegro – The Pros and Cons

Jan 4, 2025 | Private List update

I’ve been actively investing in Montenegro for almost a decade and it’s been a good ride. In this video with Ksenija (one of my realtors in Montenegro), we discussed the pros and cons of investing in Montenegro.

Do note that I forgot to mention in the video that renovations/remodeling are particularly complicated in Montenegro. Why? It involves a lot of chasing people around for things to happen. Much more so than in other markets, and I’ve done renovations all over the world.

To put it in a nice way, the country is so gorgeous it distracts people from work 🙂.

https://youtu.be/ZbL1qLs0G-M?si=HLGbeNPsMW9BqiAq

Investing in Montenegro – The Pros and Cons (https://youtu.be/ZbL1qLs0G-M?si=HLGbeNPsMW9BqiAq)

The most complete analysis of the real estate market in Montenegro

You won’t find any article online that is more thorough than my analysis of the Montenegro real estate market. If you are considering investing there, it is a must-read.

Also, just a reminder that Montenegro is one of the easiest and most affordable countries in Europe in which to obtain residency. However this only applies to citizens of developed countries, other European countries, Latin America and South Africa. Here is more information on how to obtain residency in Montenegro. One of the ways to get residency is actually through purchasing real estate.

If you want to buy real estate in Montenegro using crypto, send an email with your Whatsapp/Telegram and I’ll put you in touch with the right person.

To a World of Opportunities,

The Wandering Investor.

Other articles on Montenegro:

Available services in Montenegro:

If you want to read more such articles on other real estate markets in the world, go to the bottom of my International Real Estate Services page.

Subscribe to the PRIVATE LIST below to not miss out on future investment posts, and follow me on Instagram, X, LinkedIn, Telegram, Youtube, Facebook, and Rumble.

My favourite brokerage to invest in international stocks is IB. To find out more about this low-fee option with access to plenty of markets, click here.

If you want to discuss your internationalization and diversification plans, book a consulting session or send me an email.

Transcript of “Investing in Montenegro – The Pros and Cons”

LADISLAS MAURICE: Hello, everyone. Ladislas Maurice from thewanderinginvestor.com. Today, we shall be discussing the pros and cons of investing here in Montenegro with charming Ksenija. Ksenija, how are you?

KSENIJA: I am good. How are you doing, Ladislas?

LADISLAS MAURICE: Good, good, good.

KSENIJA: It’s nice to have you here again.

LADISLAS MAURICE: Yes, I spend all my summers here in Montenegro. So Ksenija is a realtor that specializes essentially on real estate here on the coast, all around the coast in Montenegro. She’ll be discussing the pros because she’s Montenegrin, and as she discusses the pros, I’ll jump in there and be the bad apple and mention some of the cons that I’m aware of. Sounds good?

KSENIJA: Sounds good as always. [laughs]

Property prices in Montenegro

LADISLAS MAURICE: All right, fantastic. So what do you believe are the pros of investing here in Montenegro?

KSENIJA: Well, Montenegro is one of the, currently, the most rapidly growing countries in this part of the Europe. The property market is now increasing, and it’s growing. The properties are growing in the value.

LADISLAS MAURICE: How much did they grow in the past year? Because it grew quite a lot.

KSENIJA: Well, it really depends from the project to project, but we are going to be talking even up to 30% on some of the projects.

LADISLAS MAURICE: Yeah. I think this is important for people to know, property prices here on the coast in Montenegro, I’d say even 30%, 35% in one year in Euro terms.

KSENIJA: Yeah. And increase of the tourists, which is present, year by year, and the rental yields, which are going up as well. This is one of the main things that we can mention.

Rental market in Montenegro

LADISLAS MAURICE: Are the rental yields really going up, though, because, I mean, property prices went up 30%, 35%, but the rents, what about the rents?

KSENIJA: Well, the rents have also gone up because now a bit the tourist climate, let’s say, changed. We have more and more people coming from the Western part of the world, and also we have to mention the increase of the bigger projects, which are now more and more present here in the Montenegrin market. And we are talking about not just now regular properties, like buildings with apartment blocks and that’s it, but we are talking about apartments with additional amenities, like pool, sauna, fitness, steam room, and this is adding to the rental prices as well.

And again, we have to mention the out-of-the-season rentals, which gone up. That’s why I’m talking about this increase, because we have more and more people, especially after COVID, which came here to live, to either come for a month or two. We’re talking about not just digital nomads, but also people who are just like to enjoy the winter here, because the climate and weather, the most of the year it’s pretty much like this, sunny.

Population growth in Montenegro

LADISLAS MAURICE: And I think you raise an important topic. So the population of Montenegro grew 10%, so massive increase of people. Why? Driven by four types of people. One, Russians that are either seeking to evade the draft in Russia or that want to have access to, that want another residency so that they can continue doing business online. So that’s been a huge influx. Two, a lot of Ukrainians have come here. Typically, the Ukrainians who come to Montenegro are independently wealthy, or they’re entrepreneurs. The one that needs support or just want a job, typically, go to the European Union, where they get a lot of help and access to a healthy labor market. So here, it’s more entrepreneurs. Third, a lot of Turks have moved here as well. And fourth, a lot of Westerners who typically want to live in a country with a bit more freedom.

So the population grew 10%, which means that even though property prices went up 30%, 35%, rents have also gone up roughly the same amount. So the yields, I wouldn’t say that the yields are increasing, I’d say that the yields are essentially flat. Real estate is more expensive, but rents are more expensive. And you have, overall, a healthier market, in the sense that you have tenants all year round now, which before was a lot more complicated, with winter being very empty in Montenegro, but not anymore. So overall, I find it healthy.

Tourism growth in Montenegro

LADISLAS MAURICE: This being said, I have to say I don’t know what your impressions are. The impressions I have from this summer is that tourism is actually down. Are you seeing this with your bookings? Because you have a whole division taking care of Airbnbs? Are you seeing bookings generally a bit down versus last year, or versus pre-COVID?

KSENIJA: Maybe versus pre-COVID, let’s put it this way, maybe there is. Let’s say, there was a slight decrease comparing to the pre-COVID state, but comparing to the last year, it’s pretty much the same this year. So this is what our statistics have shown since we are dealing also with the booking. So I would say that, let’s say, it’s going in the right direction. It will, maybe this year or two that we had behind us, that influence on this season, but it’s, let’s say, improving.

LADISLAS MAURICE: So overall, tourism roughly flat versus last year, but still below pre-COVID, which is a bit troubling in the sense that a lot of destinations in the world are above pre-COVID, not Montenegro. But because of all the full-time people that are moving here, overall, for property investors, it’s still a good market.

KSENIJA: Yeah. And I would like to add up on the nationalities you mentioned that came in, and the investors, we see the increase of also people coming from western parts of the Europe, like from Poland, we have a lot of investors. We have Germany.

Germans moving to Montenegro

LADISLAS MAURICE: Yeah, a lot of German money. So why are Germans moving here?

KSENIJA: Well, this can we like to divide, [laughs] let’s say, Germans into two groups, the ones who are not so much satisfied, let’s say, with the situation in Germany, with the government, again, with their position in EU currently, and all the pressure, especially now with the situation in Ukraine. This is also influencing them. Then the electricity and the problems that they have with the gas supply. I would say that the majority of them, they are moving in a great extent. And then that we have the other group, where we have people who are still in Germany, but who are looking to move their money outside of Germany and to invest here in a place, in a liquid, let’s say, property, and in a place where they know that their money will keep its value. And not just keep but also count on the increase of the value. So these type of people we have.

And of course, we have more and more German tourists. I mean, you can see even with the car plates on the streets. And they are more, let’s say, focused on the southern part of the coastline towards Bar.

LADISLAS MAURICE: Okay. Why?

KSENIJA: I think they prefer this kind of, let’s say, more open sea. There is also a lot of Germans, they even have their community there who moved like, not just now, but in the last, like, 10 or 15 years in that part. And then there is a lot of, let’s say, their place where they can build houses, because there’s still a lot of free space for construction in that area, comparing to, let’s say, Budva, so that’s why.

LADISLAS MAURICE: Yeah. And I have to agree, Germans leaving Germany is a big investment theme. It’s a strong trend that’s probably going to continue for the years ahead.

Liquidity of real estate in Montenegro

LADISLAS MAURICE: Again, we’re talking to a Western audience. You said that the market is liquid here. It’s not as liquid as most Western markets, let’s be very clear. It’s not like the US where you put your house up for sale and then within a week, it’s sold, or like it was. The reality is, when you try to sell something, it can take at least a few months. I mean, typically, you’re not going to sell it in a few days. If you’re selling it in a few days, you probably underprice it. So it’s not a very liquid market. Why? Because there isn’t any credit in the system. There are no mortgages. There are, on paper, some mortgages for EU people, but it’s just extremely complicated, not worth it.

Essentially, it’s a cash market, so it means that very few people have to sell. So when there’s an economic crisis or whatever, you don’t see prices crashing completely. If prices do go down, it happens gradually, so you can always exit if you want to make an exit, and you take your time, because crashes don’t happen overnight. So by investing here, you diversify into a market with very different dynamics. Now it doesn’t mean that it doesn’t have a different set of risks, because it does, but it’s diversification, but for sure, it comes with a different set of risks. I mean, we are in the Balkans, things happen historically. There could be war in Serbia with Kosovo, etc. Would this impact Montenegro? Probably not. It would probably just mean more people moving to Montenegro.

Because what we figured out is that, in many ways, Montenegro seems to benefit from volatility. When there was COVID, a whole bunch of people moved here because it was pretty open. There’s the war in Russia and Ukraine. A whole bunch of people are moving here because, even though it’s in NATO, it’s still trying to stay relatively neutral, and it’s still welcoming of Russians. So when there are tensions, somehow Montenegro seems to be doing better. So I don’t know if this is going to continue, but for the past few years, this has become the trend.

KSENIJA: We can see definitely the trend. And when I talk about liquidity, I also go, let’s say, five years in advance since you know that Montenegro is also on a path of joining European Union. And while we are in this, let’s say, [laughs] I know your opinion on this, however, we need to talk in the aspect of the properties itself. We have the example of Croatia that is right by us, and we understand what happened, where the prices went, again, up to 30%, 40% once they entered the European Union. We don’t know when this is going to happen. Is it going to be two years, three, five? But while we are, this is, let’s say, the right moment to jump on the train, because maybe in a few years, it’s going to be too late.

Montenegro joining the EU

LADISLAS MAURICE: So about the European Union, I have to jump in here. I’ve been coming here since 2017, actively been doing real estate deals here. And when I first came in 2017, people were telling me, “Oh, Montenegro will join the European Union in 2022.” Then it became 2023, then it became 2025, then it became 2028. Now I’m starting to hear 2030. So I wouldn’t necessarily bank on this for as an immediate or short-term catalyst. Long-term, yes, potentially, but I wouldn’t come here with this in mind. And again, if you say that property prices will go up 35%, 40% because it enters the EU, if the situation doesn’t change, then the 35%, 40% increase we saw in prices because of Russian money would essentially leave, because their assets wouldn’t be safe anymore here.

Montenegro, that is still very reliant on Russian investment, entering the European Union, overall for property prices, would not necessarily, I don’t feel would be a massive catalyst. Maybe in the regions next to in Herceg Novi, right next to Croatia, I think that would be very positive, because there’s very little Russian investment in that direction. But here in Budva, where we are, where it’s a lot of Russian investment, I would actually expect it to be potentially a net negative as the Russian middle class, if the situation doesn’t change, if there are still tensions, would think, “Oh gosh, my money won’t be safe in the EU. I need to sell.” So I don’t know. I have mixed feelings about the EU for the market. It’s gray, positives, negatives, cool. Let’s move on.

Coastal real estate inventory in Montenegro

KSENIJA: What I would like to add also is the fact that we have to, once talking about Montenegro comparing to the other markets, as you said, Montenegro has one thing, which is a small coast and limited space for construction. So when we talk about liquidity, we also have to have in mind is that there is no endless places where you can construct. Here, it’s quite an opposite.

LADISLAS MAURICE: Yeah. But, like, I’ll ask the camerawoman to show us up there. I mean, people managed to build stuff on some crazy hills. So I’m always surprised. Again, [laughs] I’ve been coming here for a while. I see land, and I’m like, “Oh, they can’t build there.” And then some massive building shows up. Montenegrins are very skilled at building the impossible.

KSENIJA: [laughs] This is one of the ways, we always find a way. But here we have to take into account that things have been changing in the last years, because Budva itself has been already quite over-constructed, and by the new, let’s say, wave also influence in the European regulations, the things in terms of the constructions have changed significantly.

LADISLAS MAURICE: Yeah. The building standards have definitely gone up, for sure, as have construction costs.

KSENIJA: They have gone up. And now it is, let’s say, much harder to get a building permit for a project, because you need to go through certain steps, the project needs to be approved not just by the city architect but also by the country architect. And there are much more conditions and regulations in terms of the floors, the surrounding area. It needs to also meet the, let’s say, it needs to be also, in some extent, ecofriendly. So all of these things are now becoming, let’s say, a challenge for the investors who are building their own projects, but also very beneficial for the, let’s say, the views and the city, eventually the urbanistic look of the cities.

Especially in, let’s say, Bečići area this has been changing. And again, the Herceg Novi as well, Kotor, the city, especially, which are UNESCO heritage sites. This is one additional, let’s say, challenge in those areas, and where you have certain steps you need to follow in order to get the building permit.

Foreign investment in Montenegro

LADISLAS MAURICE: Cool. So tell us, because there’s a lot, a lot of foreign investment coming to Montenegro, big brands. Can you tell us about that?

KSENIJA: Yeah. So we have seen, in the last few years, one of the, let’s say, famous brands that came in. We already know about the Regent and the Chedi, which are part of the Porto Montenegro, the Luštica Bay. But now we had, in the last two years, already fully operating one and only resort in Herceg Novi. They are not existing at all in this part of the Europe, but they have specifically chosen Montenegro to be the first project in this part. Then we also have the Hyatt Regency Hotel Group, which has taken, this summer, one of the hotels in Kotor Bay, with an amazing, let’s say, landscapes and views.

Then we have also Marriott Group, which is going to be bringing the Ritz-Carlton Hotel on the western tip of the Luštica peninsula, which will be overviewing the whole, let’s say, the part of Adriatic Sea, the open views. And then on the Boka Bay as well is going to be very close, like, 30 minutes’ drive to Tivat Airport and two hours’ drive to Dubrovnik Airport. So it makes it very convenient. Then we have the Mövenpick in Risan, which will be fully renovating one of the older, let’s say, hotels in the first line. And it will definitely contribute to the quick development of Risan, which has also very good position in the bay, very close to the Tivat, but also to Herceg Novi and to the airport of Dubrovnik. So these are some of the brands–

LADISLAS MAURICE: And the Intercontinental as well?

KSENIJA: Yes, we have the Intercontinental in the Čanj. This is going to be also Intercontinental Amma. This is the part of towards Bar Riviera, which is also developing. So let’s say, we cover the whole coastline.

LADISLAS MAURICE: And I think this is interesting, because it’s not just Kotor Bay that’s developing. Personally, it’s my preferred area, but it’s really the whole coast of Montenegro, from top to bottom you have all these luxury developments that are taking place, that are being built by big international brands.

KSENIJA: And once talking about the north of the country as well, we have to mention that not just this hotel, but other five star hotels are being also built there in the last few years, especially with the citizenship program that we had behind us in the last two years. So this part of the country is quite developing. Also having in mind the highway that has been constructed, which now from Budva, let’s say, to Kolasin to the ski resort, it only takes you one hour and thirty minutes to get there.

LADISLAS MAURICE: So literally, from here, where we’re chilling, to the ski slopes, an hour and a half, which is pretty nice. Because here, in winter, I mean, the weather is pretty decent. Often, in winter, you don’t even necessarily need a sweater. During the day, you can walk around in a shirt, and then you can just go skiing. So this is really cool.

New highway in Montenegro and Chinese debt

LADISLAS MAURICE: The highway is an advantage from a logistics point of view. But then again, the government put itself in a very uncomfortable situation in terms of taking a lot of credit from China for that highway. So the government now has probably a bit more debt than it should have on its balance sheet because of that highway.

So was that highway a good investment for the country? I don’t know. Could it be a source of future taxes to try to pay it back? Probably. So as a tourist, as someone living here, it’s very convenient, it’s very nice to have that highway. From a macro point of view for the country, I’m not too sure it’s a positive. But, I mean, we don’t need to talk about that too much.

KSENIJA: Also to mention here that the highway, as you said, will improve the logistics and definitely the production and the export, and, of course, the communication with the neighboring countries. And not just neighboring but also, I personally working quite a lot also with Germans and with the Polish people who are now coming by car, because it’s even more accessible, more quicker, especially because, in Serbia, there was also the highway which has been done, so the connection is now much better.

LADISLAS MAURICE: That’s true. It’s not just the highways in Montenegro that’s important, new highways in Serbia, new highways in Croatia, new highways in Bosnia as well. So just getting to Montenegro from the rest of Europe is becoming easier, which is important, because if the reality is disposable incomes are being squeezed in Europe. Europeans are not getting richer with inflation, with the energy crisis, with the situation with Russia and Ukraine. Life is increasingly tough for Europeans, so the overall basket of vacation money in Europe, I would tend to say, is decreasing. So it’s important for Montenegro to keep its tourism industry to become more accessible. So by road, it’s becoming more accessible but again, as a negative, I have to say Montenegro is not very well connected.

Montenegro airport connectivity

LADISLAS MAURICE: From an airport point of view, it’s easy to fly from Montenegro to wherever in Europe in generally one flight, especially in summer. But if you want to start going international, if you want to go to the US, if you want to go to Canada, if you want to go to Asia, if you want to go to the Middle East, generally, it’ll take one or two flights to get there. So the main hubs for Montenegro are Serbia. So just there are a few flights every day from Podgorica, the capital, and from Tivat to Serbia. And then, with Air Serbia, you can connect quite easily to the rest of the world. And also Turkish Airlines, again, also a few flights directly to Istanbul, and there you really have access to the rest of the world. So I’d say those are the two main connections. And then there’s also Dubrovnik Airport, which is also quite seasonal, but which is a half-hour drive away from Herceg Novi.

So if you’re someone that travels a lot, a lot, a lot, having Montenegro as a base is not very convenient. Personally, I come to Montenegro every summer. When I come here, I stay here for two months, and I don’t really leave, unless I drive to Albania, or to Serbia, or to Bosnia to go hang out for the weekend or something, but I won’t be using this as a base to fly around. I think people just need to keep this in mind. So for digital nomads, it’s hard for digital nomads to have Montenegro as a base. They’ll come here for a few months and then move on, and then come back later on, etc., but it won’t be a base from which to travel.

New luxury developments in Montenegro

KSENIJA: And talking about the big project that came in, we also have now the announcement of the one part of our, let’s say, coastline, Bigova, which is like a small fisherman village, which is going to be, which has a plot on the first line where it will be a project of 400 million worth.

LADISLAS MAURICE: That’s big.

KSENIJA: It’s going to be really huge project, like, similar to the big projects, like, the same concept, let’s say, because–

LADISLAS MAURICE: Who’s the investor?

KSENIJA: Well, there are few debuts, let’s say about it, but it’s from the United Emirates.

LADISLAS MAURICE: Okay, Arab money. A lot of Arab money coming into Montenegro. I mean, Porto Montenegro is now also UAE money. Luštica Bay, all of that is Egyptian money, but then there’s a lot of money indirectly from the UAE as well. So now Bigova Bay. So a lot of Arab money is finding its way to Montenegro.

Taxation and cost of living in Montenegro

KSENIJA: Regarding the investments, definitely, we need to mention the taxes, which are very competitive, comparing to the Europeans, and again, much lower, let’s say, cost of life here. The electricity, since Montenegro also produces its own electricity, and it even exports it.

LADISLAS MAURICE: Hydro, mostly.

KSENIJA: And for example, the utility costs. I mean, definitely, especially for people from US, I know that they get quite surprised when understanding that for the electricity, for the water, let’s say, for the one-bedroom apartment here on the coastline, you will be paying for all of this around €70.

LADISLAS MAURICE: Yeah.

KSENIJA: It’s quite affordable.

LADISLAS MAURICE: I’d say amongst the lowest utility prices in the world, objectively, for electricity and water. Really, really low prices. And that’s one of the advantages of Montenegro, and also why people are moving here and why people continue to move here, which is good for real estate, it’s your fixed costs when you live here, are actually very low. And then food that is locally produced, also very affordable. Like, ham, and cheese, and local vegetables, local fruit, bread, super affordable. Anything imported more expensive than in Europe. So you just need to calibrate, when you live here, to see, do you want to live a bit local? Then it’ll be very cheap. If you want to live only on imported stuff, you’re probably better off just being in Spain or something. But yeah, taxes are low.

I don’t want to go into a whole tax discussion, but generally speaking, for rental income, you’re looking at a 15% tax on rental income, but you can remove 30% for expenses. So effectively, the rental income tax is like 10.5%, so very low by global and European standards.

New golf course in Montenegro

LADISLAS MAURICE: And can you tell us as well about the golf course? Because this is big. There’s no golf course now, but they’re building one.

KSENIJA: They are actually building it, and it’s going to be a unique spot, I would say, in Montenegro. And not just in Montenegro, but this part of the Europe itself, because it’s going to be an 18-hole golf course designed by Gary Player. And, let’s say, from every hole, you will have magnificent views on the Boka Bay, on the Adriatic Sea. It’s something that all, let’s say, golf fans can look to in the next, well, actually, they finished quite a big part of it. So it’s located on the Luštica Peninsula.

LADISLAS MAURICE: When are they launching it?

KSENIJA: So we are expecting it within this year.

LADISLAS MAURICE: Okay, cool. Great. So, I mean, that’s good for Canadians and Americans who love to golf.

KSENIJA: Yeah.

Get in touch with Ksenija

LADISLAS MAURICE: That’s good. Cool. Look, thank you very much, Ksenija. I wrote a whole article on the real estate investment market here in Montenegro. There’s a link below. And then also, if you’re interested in making a real estate investment here in Montenegro, essentially anywhere in the country, Ksenija and her team can help you find a property, so whether it’s an investment or just a lifestyle property, and then they can also help you manage the property if you want to rent it out long-term or on Airbnb.

KSENIJA: Thank you.

LADISLAS MAURICE: Great, all right. And there is Ksenija’s contact information right below. Ksenija, thank you very much.

KSENIJA: Thank you, Ladislas.

LADISLAS MAURICE: Always a pleasure.

KSENIJA: The same.

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