Real Estate has been widely recognized as one of the most safe investment types. Not only that these properties generate income through rental or return your investment through sale, but the investment properties can also become a primary home address. Montenegrin real estate market recorded a positive trend over the past several years and prices are expected to have a steady growth for another couple of years. Now turns to be the right moment to invest in property in order to gain highest return on investment.
Know your tenant
Diving into rental investment does not mean simply buying any property and expecting to rent it right away. The first and most important step is to identify the rental demand and to understand what type of property and in which location is more likely to be rented quickly. Consult a RE/MAX Montenegro rental agent to get a full insight on the current rental market situation – they will help you understand market trends, rental clients and calculate the cost-effectiveness of your potential investment.
What types of properties are good for renting?
When it comes to rentals, highest in demand are one-bedroom and smaller two-bedroom apartments. Especially if you are thinking of renting on long term. These types of properties are usually rented out to students, business people both locals and foreigners, young couples who still don’t have a property of their own. Short-term rentals are extremely attractive since these generate higher income over relatively shorter periods of time. However, these are also very time-consuming as they require attention all the time: coordinating times of arrival and departure of guests, property maintenance, assistance to guests, etc. In order to successfully manage the short-term rentals you would have to be present all the time or to have someone manage the property for you. Talk to your RE/MAX Montenegro agent to get a better picture of which rental option would be most suitable for you. And this brings us to the next question…
…Where to buy?
This should slightly depend on whether you want to deal with short-term or long-term rentals. If tourism is in your blood and you love the idea of being a host to visitors to Montenegro, then coastal area (and nowadays north of the country as well) is where you should be considering buying your investment property. Think about what kind of home and what features would be important for tourists visiting your area and start your property search there. Who knows, it might turn into a successful business eventually!
Long-term rentals are not that much affected by location, although rental market in the capital city, Podgorica, is the most dynamic and always in demand. This is mostly because Podgorica is a business, educational and cultural hub of the country and ‘lives’ throughout the year, whereas south and north of the country are greatly affected by the seasonality. Monthly rent in Podgorica vary from €300 to €650 for one and two bedroom apartments and from €800 to €1.300 for three bedroom apartments in the most popular area around Capital Plaza and City kvart. Similar properties on the coast can be rented at somewhat higher prices: studios and one bedroom apartments range from €350 to €600, while monthly rent for two and three bedroom apartments range from €800 to €1.500.
Expenses
Keep in mind that your investment does not finish with the purchase of the property. There are additional costs related to the purchase that you have to keep in mind, such as notary fees, administrative and property transfer taxes, etc (take a look at the detailed breakdown of related expenses on our blog or consult one of our sales agents). You will also have to furnish the apartment and equip it with all the necessary appliances and gadgets. Again, think about what your tenants would find useful to have in their home – this will help increase market value of your property and help you rent it at a higher price.