Investment in real estate in Montenegro for income
Due to the fact that Montenegro is one of the most environmentally friendly countries in Europe and does not have any hazardous industries on its territory, more and more foreign investors and real estate buyers are paying attention to it.
The main places of interest to them are cities and even towns located on the coast of the Bay of Kotor, which is also called “the southernmost fjord of Europe.” Investing in real estate in Montenegro for income continues to be profitable, and the number of people wishing to rent year-round housing continues to grow due to the warm and mild Mediterranean climate.
Even an apartment in the old building area of Budva with a kitchen combined with a living room and one bedroom can generate an income of about 250 euros per month in the autumn-winter period.
In turn, a modern new “one-room apartment” in the city center will bring its owner at least 50-60 euros per day. In the past, many Russians bought housing in Montenegro specifically for the purpose of renting it out, significantly improving their budget. Until recently, their market share reached 80%, which was explained by the simplicity of the purchase procedure (only a foreign passport was required to complete the transaction) and the possibility of automatically obtaining a residence permit).
However, after 2014, with the introduction of sanctions, the number of Russian citizens planning to invest in real estate in Montenegro for income fell sharply, and their place was taken by citizens of Turkey and Middle Eastern countries (35%). In addition, UNESCO’s decision to limit construction on the coast of the Bay of Kotor due to a serious threat to the local unique nature had an impact; kiwi, pomegranate, fig, blackberry are just a small part of the fruit-bearing plants that are found in this region. For this reason, housing prices, already steadily growing, rose by another 20-25%, becoming, with the fall of the ruble and hryvnia, practically unaffordable for a significant part of the population. Now buyers from all former Soviet republics, including Russia, account for only 15%, and Germans and French predominate among EU citizens.
Investments in land in Montenegro for construction
Large foreign investors often prefer to become owners of not already finished real estate, but to invest in land in Montenegro for construction, since this is permitted by law. Only agricultural land is prohibited for foreigners, and the possibility of any construction in national reserves is also excluded. In all other regions there may be certain restrictions that are not of fundamental importance.
Porto Montenegro – “Montenegrin Monaco”
This is especially actively used by Arab developers in Tivat, who have already invested 250 million euros in the construction of the luxury complex Marina Porto Montenegro, practically from scratch, and are not going to stop there. Here it is planned to build a “Montenegrin Monaco” with all the essential attributes of the principality, and the highest level of prices does not bother the owners at all – over the past decade, 260 luxury houses and apartments have been sold in Porto Montenegro for a total amount of over 200 million euros.
However, this does not mean that investments will be directed only to the construction of fashionable hotels, apartments and other infrastructure designed for a very wealthy audience. Thus, in 2016, the largest water park on the Adriatic coast opened in Budva, the total cost of which is about two million euros, of which 500 thousand are for equipment and attractions.
A plot of land with an area of 42 hectares for the purpose of investing in Montenegrin land for construction was leased for 30 years by AquaTerra solutions from Podgorica, based on Russian capital. Every year the authorities of Budva will receive 240 thousand euros in rent, however, given the high traffic (up to six thousand people at a time) and the average ticket price of about 20 euros for adults, these investments will very soon begin to bring tangible profits.
Advantages of investing in real estate in Montenegro
Despite the fact that the construction of new housing is proceeding at an accelerated pace, the vast majority of foreigners, recently joined by British citizens, continue to invest in secondary real estate. Wealthier investors give preference to new buildings, as do land plots.
The latter are becoming fewer and fewer, so they seem to be profitable investment properties for the subsequent construction of private housing, hotels, restaurants and entertainment venues.
Each of these acquisitions has its own advantages of investing in real estate in Montenegro. In particular, for Russians and citizens of non-EU countries, last summer the government announced the introduction of the state investment program “Montenegro Citizenship by Investment 2019”. Its launch took place in January of this year, and so far it is designed for two thousand people.
In order to become the owner of a Montenegrin passport (already having a residence permit, which is issued in one month), you need to fulfill a number of conditions:
- make a free contribution to the government fund in the amount of one hundred thousand euros;
- undergo a security check;
- confirm the legality of the origin of funds;
- buy real estate in Montenegro worth from 250 thousand euros, provided that it will not be sold within the next five years; as an alternative option – instead of buying real estate, invest at least 450 thousand euros in the development of infrastructure in Podgorica or the Montenegrin coast;
- pay an administrative fee of 15 thousand euros. The total amount depends on the number of family members who, in six months, will also become holders of Montenegrin citizenship.
A Montenegro passport gives visa-free entry into 117 countries, including the Schengen area, and does not require residence in the country for any specific period. However, even without a passport, investments in Montenegro are investments in an economically developing country, with a steadily growing GDP, low prices and a mild Mediterranean climate with an abundance of fruits, fish and seafood.