Long-Term Real Estate Rental in Montenegro

Published on September 30, 2025 and written by Cyril Jarnias

Montenegro, the gem of the Balkans, is attracting an increasing number of foreign real estate investors thanks to its idyllic setting and booming rental market. Whether you’re a novice or experienced property owner, long-term rental in this country offers compelling opportunities for generating stable income. This article will guide you through the essential steps to succeed in your Montenegrin rental investment.

Montenegro’s Rental Market: Untapped Potential

The long-term rental market in Montenegro is experiencing sustained growth, driven by several factors:

– Influx of expatriates and digital nomads attracted by quality of life and affordability – The country’s economic development, particularly in tourism and service sectors – Infrastructure improvements and urban modernization

According to recent data, average rental yields range between 5% and 7% annually in prime areas like Budva, Kotor, or Tivat. For example, a well-located 60m² apartment in Budva can rent for €400 to €600 per month.

Coastal cities remain the most sought-after, but the capital Podgorica also offers interesting opportunities for long-term rentals, particularly among professionals and students.

Choosing the Right Property for Long-Term Rental

To maximize your chances of success, it’s crucial to select a property suitable for long-term rental:

• Prioritize central locations or those well-served by transportation
• Choose functional and well-designed housing
• Ensure the property is in good overall condition to minimize maintenance costs
• Check for amenities appreciated by tenants (parking, balcony, air conditioning…)

1 to 3-room apartments are particularly sought after for long-term rental, especially by young professionals and couples. In tourist areas, houses with gardens can also find takers among expatriate families.

Before purchasing, research planned development projects in the neighborhood. This can significantly impact your property’s future attractiveness.

Legal Framework: Keys to a Solid Lease Agreement

In Montenegro, the legal framework for property rental is governed by the Law on Obligations. Here are the essential points to know:

– The lease agreement must be established in writing and registered with tax authorities – The minimum duration for a long-term lease is typically one year, renewable – The owner must declare rental income and pay a 9% tax on collected rent

To establish a solid lease agreement, ensure to include the following clauses:

• Precise identification of parties (landlord and tenant)
• Detailed description of the rented property
• Amount of rent and charges, payment terms
• Lease duration and renewal conditions
• Move-in and move-out inspection reports
• Distribution of maintenance and repair responsibilities
• Lease termination conditions

It’s highly recommended to consult a local lawyer specializing in real estate law to draft your lease agreement. This will ensure compliance with Montenegrin legislation and protect you in case of disputes.

Setting the Right Price: The Art of Rental Pricing

Determining the appropriate rent is crucial for attracting tenants while ensuring satisfactory profitability. Here are some elements to consider:

1. Study the local market: Analyze similar listings in your neighborhood to get an idea of prevailing prices. Real estate listing sites like Montenegro-estate.com or Propertyinmontenegro.com are good sources of information.

2. Assess your property’s assets: View, exposure, amenities, proximity to facilities are all factors that can justify higher rent.

3. Account for seasonality: Even for long-term rentals, rates can vary throughout the year, particularly in tourist areas.

4. Anticipate expenses: Ensure the rent covers your costs (property tax, insurance, maintenance) while remaining competitive.

As a reference, here are some price ranges observed for long-term rentals in 2025:

– Studio in Budva: €300-€400/month – 2-room apartment in Kotor: €400-€600/month – 3-bedroom house in Tivat: €800-€1200/month – 3-room apartment in Podgorica: €500-€700/month

Don’t hesitate to adjust your rates based on demand and your occupancy rate. A slight rent reduction can sometimes significantly reduce vacancy periods.

Property Management: Keys to Harmonious Tenant Relationships

Good property management is essential for maintaining positive relationships with your tenants and sustaining your investment. Here are some tips to achieve this:

1. Rigorous tenant selection

• Their professional and financial situation
• Their previous rental references
• Their long-term plans in Montenegro

2. Clear and regular communication

• Clearly explain contract terms and building rules
• Remain accessible and responsive in case of problems
• Inform them in advance of any scheduled interventions in the property

3. Regular property maintenance

• Conduct regular inspection visits (with tenant consent)
• Perform necessary repairs promptly
• Schedule refresh work between tenancies

4. Conflict management

In case of disagreement, always prioritize dialogue and amicable solutions. If necessary, don’t hesitate to consult a professional mediator.

5. Legal compliance

• Declaration of rental income
• Safety and habitability standards of the property
• Eviction procedures in case of non-payment

If you don’t reside in Montenegro or prefer to delegate daily management, you can hire a property management agency. These professionals will handle tenant search, rent collection, maintenance management, and potential disputes. Expect to pay approximately 8% to 10% of the rent for this service.

Optimizing Your Rental Investment in Montenegro

To maximize the profitability of your long-term rental property in Montenegro, consider these strategies:

1. Geographic diversification

Don’t limit yourself to traditional tourist areas. Developing cities like Bar or Herceg Novi offer interesting opportunities with more affordable purchase prices.

2. Strategic renovation

• Thermal insulation to reduce expenses
• Modernization of kitchen and bathroom
• Installation of eco-friendly equipment (solar panels, water recovery system…)

3. Complementary services

• High-speed internet connection
• Regular cleaning included in rent
• Provision of bicycles or sports equipment

4. Advantageous taxation

• Only 9% tax rate on rental income
• Possibility of real estate depreciation
• Advantageous tax treaties with many countries

5. Anticipating market evolution

Stay informed about urban and tourism development projects that could impact your property’s long-term value. Montenegro’s upcoming EU accession, for example, could further stimulate the real estate market.

Conclusion: Montenegro, a Promising Destination for Rental Investment

Investing in long-term rental real estate in Montenegro offers numerous advantages: a growing market, attractive yields, and favorable tax framework. However, as with any foreign investment, it’s crucial to thoroughly research local specifics and surround yourself with competent professionals.

By following the advice presented in this article, you’ll maximize your chances of success and can comfortably enjoy the income generated by your Montenegrin property. Remember that the key to success lies in rigorous management and constant attention to tenant satisfaction.