How to invest in real estate in Montenegro?

Some say that the best way of investment is – investing in real estate. Buying and owning some kind of real estate is an exciting life-improving strategy, that can be both satisfying and lucrative.

Unlike stock and bond investors, prospective real estate owners can use leverage to buy a property by paying a portion of the total cost upfront and then paying off the balance with interest, over time.

The four clue ways in which investors can make money through real estate are: becoming landlords of rental properties, trading, known also as the flipping of the bought lands, joining the investment groups, and real estate investment trusts (REITs).

Here we present you with some of the easiest ways how to invest in real estate in Montenegro, and tips on how investors put their property money to good use. Read on and find answers to the frequent question

How to start investing in real estate in Montenegro?

Simple ways of choosing a real estate on the Montenegro coast

If you’re looking for a residence or investment property, residential or any other, there are numerous factors to base your decision on. Some of them are the distance from your job, your spouse’s job, the school for your children, as well as the growth and development potential of the neighbourhood.

1. Legal ownership of the real estate on the Montenegro coast

Rental properties can provide regular income for the owner while keeping the incoming capital growth through leverage. Of course, rental income isn’t the owner’s sole focus. In an ideal situation, a property appreciates over the course of the mortgage, leaving the landlord with a more valuable asset than he started with.

But, answering the question of how to invest in real estate in Montenegro doesn’t end just by buying the lands. Creating an influential and prosperous environment is basically impossible without a property management team experienced in dealing with all the expenses when “hard climates” arrive (because they will).

2. Joining Real Estate Investment Groups

When contemplating how to invest in real estate in Montenegro, you should take into consideration joining investment groups that are ideal for people who want to own real estate without the hassles of running it. This is a much more hands-off approach to real estate that provides income for every investor in the Group, but also appreciation and a “good name” in the years to come.

Real Estate Investment Groups are a form of small, mutual funds, that investors share on rental properties, and are probably one of the easiest ways how to start investing in real estate in Montenegro

A typical Real Estate Investment Group functions by accepting construction companies of apartments or condos to enter mutual investors groups and allowing them to purchase their real estate in the name of the Group.

While these groups are theoretically safe ways how to invest in real estate in Montenegro, they are vulnerable because of mutual funds.

3. Trading or “Flipping” of the immovable

Investors with significant experience in land and building valuation and marketing are prone to using this small “trick” to get the capital started and increase the ability of damage repairs as the flaws in business manifest themselves.

Trading of the immovable has a shorter time period during which capital and property are tied up, circumstantial of some form. During that time and depending on the market conditions, there can be significant returns.

Real estate investing and trading requires deeper market knowledge and research paired with luck because of shaky markets and short-term traders (flippers) who often don’t invest in long-term improvements of properties, but make money by buying reasonably priced properties and adding value by renovating them.

4. REITs - Real Estate Investment Trusts

Investors who want portfolio exposure to real estate without a traditional real estate transaction choose this form of real estate investing – investing together with a group of entrusted people. REITs are essentially shared paying stocks, whose core holdings comprise commercial real estate properties with long-term, cash producing ideas.

As we are talking about stocks in the foundation of Investment Trusts – the leverage associated with (traditional) rental real estate does not apply here.

A REIT is created when one corporation uses the money of their investors to purchase and/or operate properties, but can also be sold/bought like any other type of stock and are highly liquid because they are exchange-traded.

REITs are a more formalized version of a real estate investment group.

Buying Montenegrin stocks vs. investing in real estate in Montenegro

There are ups and downs for both real estate and stock investments. Investing can be complicated. Especially when you don’t know what to invest in or how to invest in it. We automatically think that buying stocks would be a more suitable option for us, but, the truth is – real estate vs. stocks is a long-running battle.

The decision on investing in real estate in Montenegro or Montenegrin stocks is a personal choice and depends on an investor’s pocketbook, tolerance and willingness to take risks, as well as their goals for the future and investment style.

Investments are inherently risky – real estate in particular. As with any potential investment, doing thorough research and examining all your options is crucial. One of the causes of the mortgage crisis is predatory loan companies taking advantage of vulnerable homebuyers.

So, how to start investing in real estate in Montenegro? – Understand the risks and avoid working with lenders!

Investing in real estate isn’t for everyone. It is not as liquid as stocks could be, requires research, a large amount of money, time and dedication, but also provides passive rental income. 

For many prospective investors, real estate is appealing because it is a tangible asset that can be controlled, and has added benefit of diversification. Real estate investors are the owners of something concrete for which they can be accountable.

Stocks are subjected to market, economic, and inflationary risks, but they do not require a big cash injection which makes them easily bought and sold. For decades, stocks have averaged a compounded serious return per year, so investing in the stock market makes more sense when paired with the benefits of gaining more income.

Why choose to invest in  Montenegro coast real estate

Investing in coastal real estate in Montenegro has a concept basically as simple as playing Monopoly. In order to succeed, you have to purchase a high-quality residence that will be recognized for its quality and will help you avoid bankruptcy by providing you with a constant income. By generating rent you can purchase more properties and confirm your position on the market.

Cities on the water are popular as ever, but smart investors will weigh risks as well as analyze the location. The coastal landholding region of Porto Montenegro near Tivat in the Boka bay is one of the most popular destinations on the Adriatic sea for foreigners, mainly from Europe.

But what is it about Porto Montenegro that is proving so attractive?

Lifestyle design

At times, people decide that they need a change in their life. They do their research and decide that the combination of a thriving and good looking village, an excellent climate and the outdoor lifestyle is something that attracts them.

There are many reasons why one should invest in a Porto property. The alluring villas and apartments by the riviera of the most beautiful Mediterranean marina, the close proximity to pristine beaches, good cuisine, high-quality nightlife in abundance, and the welcoming people are only a small part of it.

Politics

With an incredible Mediterranean landscape in conjunction with a rich history and cultural significance, Porto Montenegro is branded as a luxury destination for many affluent tourists, business travellers and hedonists. As a part of Porto’s clientele, you are granted numerous benefits like the eclectic calendar of events, sporting activities for all ages, a stable education at international schools and an outstanding natural environment.

The good side of investing in Montenegro real estate is easy paperwork for foreigners and the low taxes that are the same as for the locals. The only dissociation is that the land of natural resources, agricultural land and the land of cultural importance can’t be sold.

The requirement for foreigners to hold property through a company only applies to land, not apartments.

Unique natural and architectural gems

A world UNESCO site, The bay of Boka Kotorska is truly breathtaking, with its 12th Century Venetian architecture cities and very small, narrow street villages, set on a coastal strip made of a seriously impressive neighbourhood. The innermost depths of the Bay of Kotor at the end of the fjord are nestling at the foot of one of Europe’s most dramatic mountain scenery.

Investment in Porto Montenegro - The story of dazzling success

Tivat was once the unattractive duckling of the coastal real estate area of Montenegro. With low-cost housing surrounding a knackered communist naval base, its only redeeming feature was that it had an airport. And redeem it, it did. Nowadays, Tivat provides the back streets and access base for super slick Porto Montenegro investing.

Thanks to its very deep mooring facilities, Porto Montenegro is now home to some of the biggest superyachts ever built with customers and crews to match. The re-developed town has an excellent choice of international restaurants and shopping centres with high-end brands and is home to the Five Star Regent Hotel.

How to invest in real estate in Porto Montenegro?

Real estate in Porto Montenegro consists of apartments and hotel managed condominium options, but as you can imagine, all of this comes at a price. Investment in Porto Montenegro – the luxurious real estate village, starts at around 500,000 Euros, but for statement properties, you are looking at Euro 1.5m upwards.

The real estate market has historically been a private game and even today privately held property developers and owners often dominate the headlines. Real estate has both risks and rewards but is a greater option to choose from as a retirement investment plan, or for people who contribute largely and regularly.

Montenegro real estate investment is an ideal way to diversify your own investment portfolio, or your client’s, while at the same time reducing risk and maximizing returns. Choose to invest in Montenegro real estate and put your trading skills to the test with something very rentable so that when you’re ready to enter the more competitive market – you’ve had the practice you need.

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